ADP to Sell Stake in GMR Airports for Up to €924M: Deal Details
ADP will sell up to 7.3% of GMR Airports to its founding family.
Top Summary
- What happened: ADP, the operator of Paris airports, will sell up to 7.3% of its stake in India's GMR Airports Ltd for as much as €924 million ($1.08 billion).
- Why it matters: This deal allows ADP to partially cash out on its investment while maintaining significant exposure to GMR's future growth.
- What changes for people: ADP plans to use the proceeds for deleveraging and a special dividend. Shareholders may see dividends as soon as the 2025 financial year.
- Who is affected: ADP shareholders, GMR Airports' founding family, and the aviation sector are affected.
ADP Sells GMR Stake
ADP has agreed to sell a portion of its stake in GMR Airports to a vehicle connected to the company's founding family. The deal is valued at up to €924 million ($1.08 billion).
This multistage transaction will see ADP selling up to 7.3% of its shares.
Deal Structure
The agreement includes the sale of 3.4% of shares for €256 million.
ADP will also receive a put option to sell an additional 3.9% for approximately €285 million.
The family's vehicle will also purchase convertible bonds with a face value of €301 million, plus accrued interest.
Transaction Timeline
The transaction is expected to be completed by March 31, 2027, according to ADP's statement.
GMR Airports' shares have risen 8.4% in Mumbai over the past 12 months.
This gives the company a market value of $10.8 billion.
ADP's Strategy
ADP clarified that its governance rights and co-promoter status will remain unchanged after the deal.
The company does not plan to divest further stake in GMR Airports.
"ADP is taking the opportunity to crystallise part of the value of its investment, while maintaining a significant economic exposure to the future growth potential of this key asset,"
said ADP Chief Executive Officer Philippe Pascal.
Special Dividend Plans
ADP's board of directors has proposed a special dividend of €0.8 per share for the 2025 financial year.
Following the exercise of the option, an additional special distribution of €1 per share may be proposed.
Advisors
Citigroup Inc. served as the financial advisor to ADP.
S&R Associates and Hogan Lovells were legal advisors, while Urban Strategic Pte acted as strategic advisor.
What to Watch Next
Investors will be watching for the completion of the sale by March 31, 2027 and ADP's subsequent decisions regarding the special dividend. Further developments regarding GMR Airports' expansion plans will also be of interest.