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Atlantia reignites Abertis merger with share offer

Some 11 years after an abortive deal between Europe’s toll road giants, the Italian firm has moved to try and combine the two again.

Italian developer Atlantia is exploring a potential public offer for shares of its Spanish counterpart Abertis, the two companies confirmed yesterday.

The pair stressed that negotiations are at a preliminary stage and that no agreement has been entered. Abertis also said no valuations have been made and stated that a proposed timeline for any such deal has yet to be discussed.

“Atlantia shared its preliminary ideas on the structure of a potential corporate transaction,” Abertis told Spanish market authorities. “Amongst the possible alternatives, they commented on the possibility of structuring the transaction as a public tender offer for Abertis shares, with different consideration options without arriving at a concrete proposal.”

Atlantia merely said “a very preliminary and generic interest to examine common projects” has been discussed between the two firms, adding that there is no agreement to report on. Both Atlantia and Abertis declined to comment further on the deal.
The latest figures indicate Atlantia has a market capitalisation of over €19.3 billion while Abertis’ stands at €15.7 billion. The latter’s shares were suspended from trading yesterday following the statements.

“One of [Atlantia’s] targets has been to have 50 percent of its EBITDA from international sources so one of their rationales may be to merge with Abertis and diversify away from Italy at a lower cost than if they were to buy individual private assets,” explained Saravana Bala, research analyst at Berenberg, noting the rising prices of toll roads and airports. “In the past it has been focused on Italy and there has been a change of strategy recently.”

Atlantia’s potential move for a merger between the duo represents a revival of a €12 billion deal instigated in 2006 by Abertis for Atlantia, which the two firms hailed at the time as having the potential to create a “world leader” in toll road infrastructure.
However, the Italian Minister of Infrastructure and the Minister of the Economy and Finance at the time refused to ratify the transaction, saying the merger was not consistent with the terms of the 1999 privatisation deal of Atlantia (then known as Autostrade). Upon the transaction’s cancellation, the companies said they hoped that “future conditions will allow the plan to be viewed in a different light”.

Both Italian ministries declined to comment on the latest developments.

While the bulk of Atlantia’s revenues originate from its 16 motorway concessions across Italy, Poland, Brazil and Chile, more recent investments have occurred in the airport sector, with the group a part-owner of the Venice and Nice concessions. Earlier this month, Abertis unveiled an investment plan for the year that will see it spend at least €3.4 billion, a 30.6 percent year-on-year increase.