Spanish firm wins lucrative BAA deal as Goldman Sachs pulls out of the bidding race

Goldman Sachs has announced that it will no longer proceed with its bid to takeover BAA, leaving the Spanish contractor, Ferrovial free to complete its £10bn offer.

The deal could also lead to support services firm, Amey, owned by Ferrovial for the past three years, to manage up to £7bn worth of projects proposed by the Spanish firm for BAA. This includes the £1.5bn Heathrow East project and the redevelopment project at Stansted airport.

Substantial surge in air travel worldwide has made airports an attractive investment target. Only last month BAA promised a £9.5bn investment programme over the next 10 years in its three London airports at Heathrow, Gatwick and Stansted. BAA's non-UK assets include Budapest airport in Hungary, as well as stakes in airports in Naples, Melbourne, Perth, Darwin and four in the USA.

Goldman Sachs had been given until June 16 to make a rival offer for BAA or withdraw its interest.