Ferrovial Conquers The UK: Following In The Steps of Philip II (B) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

IMD-1-0294 © 2010
Bris, Arturo; Coughlan, Sophie

Grupo Ferrovial from Spain obtained BAA PLC, the UK airport operator, in June 2006 following one of the most enthralling fights for control in recent years in Europe. BAA was an exceptionally successful and profitable company, managing Heathrow and Gatwick airports in London, among others. Fiscal Strategy at BAA PLC, the A case, discusses the arrangement of the target company and specifically its capital structure. BAA’s strength base was quite secure, low risk and very well protected from competition. The firm had finished some acquisitions at home and abroad and had been generating substantial cash flows over the past few years.

So, Grupo Ferrovial (and Goldman Sachs, which was competing to acquire BAA) found an excellent worth opportunity by leveraging up BAA’s strengths. The B case, Ferrovial Conquers the UK, guides us through the acquisition procedure and in particular through the funding aspects of the deal. It could be used in a basic finance class to introduce capital structure and debt financing. Additionally, it may be utilized as a way to discuss with finance teams and with executives in general the complex conditions of the transaction.