A Transurban-led consortium has secured the New South Wales Government’s 49 percent stake in Sydney toll road WestConnex in a A$11.1 billion ($8.03 billion; €6.86 billion) deal.
The transaction spells full ownership of the toll road for the consortium, known as Sydney Transport Partners, which secured its initial 51 percent stake in WestConnex for A$9.26 billion in 2018.
The largest road construction project in Australia, WestConnex is a 70km network linking Sydney’s west with the city’s CBD, Sydney Airport and Port Botany. The project remains partially incomplete, with the M4-M5 link still under construction and expected to be operational in 2023.
The acquisition will be entirely equity-funded, with Transurban selling A$4.22 billion in securities to help finance the deal. The concession will last close to 40 years.
Transurban chief executive Scott Charlton said: “WestConnex is one of the largest road infrastructure projects in the world with an enterprise value of A$33 billion based on this transaction. We feel privileged to take STP’s holding in this critical asset to 100 percent. This transaction is expected to support free cash growth and distributions for Transurban security holders for the life of the concession.”
Transurban controls 50 percent of the consortium, which also comprises AustralianSuper (20.5 percent), Caisse dépôt et placement du Québec (10 percent), Canada Pension Plan Investment Board (10.5 percent) and Tawreed Investments (9 percent).
CDPQ was not part of the original consortium when it secured its initial 51 percent stake in the toll road.
In a statement, AustralianSuper head of infrastructure Nik Kemp said the additional investment in WestConnex was “a great opportunity for AustralianSuper to strengthen its relationship and invest further alongside high-quality global investment partners that are aligned in their focus on long-term value creation”.
In a separate statement, CDPQ head of infrastructure Emmanuel Jaclot said: “As a longstanding infrastructure investor in Australia, CDPQ is thrilled to join forces with Transurban and STP in acquiring a stake in WestConnex, an investment which aligns with our strategy targeting high-quality infrastructure alongside partners with extensive market knowledge and operational expertise.”
According to Transurban, the Australian Competition and Consumer Commission and the Foreign Investment Review Board have no objections to STP’s acquisition of the remaining interest in WestConnex. The deal is expected to complete in October.