Birmingham City Council announce sale of NEC Group to LDC

The NEC Group has been sold to LDC, the private equity arm of Lloyds Banking Group, in one of the biggest sales ever agreed by Birmingham City Council.

The deal, worth £307 million, was officially announced at a press conference at The ICC in Birmingham this afternoon and includes a 125-year lease on the NEC site which includes the exhibition halls, Genting Arena and the Resorts World development, and 25 year leasehold interests in the ICC and Barclaycard Arena in the city centre.

NEC Group chief executive Paul Thandi commented: “The council is able to realise substantial proceeds from this transaction whilst providing the group with an opportunity to benefit from numerous growth opportunities in the core and ancillary businesses and internationally, and ensuring it remains a cornerstone of the region’s economic prospects.”

In today's statement, Birmingham City Council said: “LDC has been selected after an extensive sale process.  The transaction maximises proceeds for Birmingham City Council and is consistent with the Council’s vision and strategic ambitions for the NEC Group and the wider regional development. LDC is providing the equity funding for the acquisition, with the provision of debt being led by Macquarie Bank.”

Birmingham City Council has retained a right to claw back certain non-core land at the NEC site for future development. The transaction does not include various plots of undeveloped land adjacent to the NEC site (primarily east of the M42), which will be retained by Birmingham City Council.

Sir Albert Bore, Leader of Birmingham City Council, said: “The announcement of a new owner is a landmark moment in the history and development of the NEC Group and its three operating sites: NEC, ICC and Barclaycard Arena.
“We are pleased to have attracted a Birmingham-based buyer in LDC that understands the local importance of the NEC and shares our vision for the future. This will ensure that the business goes from strength to strength, and that the NEC continues to play a leading role in the wider economic development of the region while securing Birmingham and the wider West Midlands’ position as the home for outstanding live events. We are looking forward to working alongside LDC to achieve this goal.”
Martin Draper, LDC’s chief executive officer, added: “The NEC Group is one of the UK’s best known and iconic businesses, particularly so in the Midlands, where it is at the heart of the region’s commercial and leisure activities for many years.
“The NEC Group has developed significantly over recent years and we are delighted to be working with such a strong and experienced team to deliver the NEC’s next exciting phase of development. We also look forward to working closely with both Birmingham and Solihull Councils to support their plans at both the NEC and City Centre sites which include the airport expansion, redevelopment of the Paradise Circus area and in connection with the HS2 project.”

The transaction is expected to complete in the second quarter of 2015.

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