Citi on track to finish Itinere merger by September(3)

Its €2.9bn acquisition of the Spanish toll road developer took another step forward on Wednesday after it reached agreement with a group of Spanish savings banks to become shareholders in the company. Itinere's merger with its acquisition parties is likely to be consummated by the end of the third quarter.

Citi Infrastructure Investors, the infrastructure investment arm of Citi Alternative Investments, has closed on an agreement with several Spanish banks to become shareholders in its portfolio company Itinere Infraestructuras and is on track to finish the transaction by the end of September.

Itinere transaction:
on the road to
completion

Caixanova, Caixa Galicia and Cajastur, all savings banks headquartered in the north of Spain, will invest €500 million in Itinere. Collectively, their investment will comprise 25 percent of the company post-merger, according to a person familiar with the transaction.

Citi said their investment will “bring valuable local knowledge to the company”. All three are providing debt financing for the transaction. Their participation will also reduce the stake held by Sacyr Vallehermoso, the Spanish construction firm that originally owned 80 percent of Itinere. Post-merger, Sacyr will own 16 percent of the company, according to the person.

Citi said it is on track to complete the merger of Itinere with its acquisition parties by the end of September.

The agreement marks the latest development in Citi’s months-long bid to give its $3.4 billion fund a platform for acquisitions in the toll road sector.

Late last month, Citi finished its public tender offer for the Mardid-listed toll road developer. It offered €3.96 per share for 100 percent of Itinere's shares. Shareholders eventually handed over 51.1 percent of the firm's shares to Citi in exchange for €2.873 billion in total.

Earlier in June, the Comisión Nacional del Mercado de Valores Spain’s securities market regulator, approved the deal on condition that 46.02 percent of shareholders accept the offer – a hurdle that was readily met.

Fidel Andueza, a partner at Citi Infrastructure Investors, is leading the Itinere transaction.