Auckland Airport has struggled over recent years weighed down by a rich valuation and low yield (1.6%), especially compared to alternative infrastructure assets – we see no reason to consider it at this stage.
On the surface AIA screens as a classic premium infrastructure asset, dominant market position, long-duration cash flows and significant growth optionality, making it highly attractive to private capital. However, a full takeover faces meaningful hurdles. Ownership is already concentrated with the government, linked stakeholders, foreign investment approvals in New Zealand are stringent and any buyer would inherit a multi-billion-dollar capex pipeline. While global appetite for infrastructure remains strong, the barriers suggest AIA is an unlikely M&A target.
- AIA looks capable of testing its 2022 low over the coming months, ~5% lower.
MM is neutral towards AIA at best
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