Canada Pension Plan Investment Board (CPP Investments) has agreed to sell its interests in Australian toll road assets WestConnex and NorthWestern Roads Group (NWRG) to Transurban for A$4.5bn (€2.8bn).
The deal involves Transurban acquiring the Canadian pension investor’s 25% stake in NWRG and its 10.5% interest in Sydney Transport Partners (STP), the concessionaire that owns WestConnex.
Upon completion, Transurban’s ownership in NWRG, which holds the Westlink M7 and NorthConnex toll roads, will increase from 50% to 75%. Its stake in STP will rise from 50% to 60.5%.
ASX-listed toll road operator Transurban said it will initially fund the transaction using committed debt facilities, which will later be refinanced into longer-term debt.
CPP Investments first backed NWRG’s Westlink M7 in 2010 before funding the development of NorthConnex in 2014 and acquiring its stake in WestConnex in 2018.
WestConnex links western and south-western Sydney to the central business district, Sydney Airport and Port Botany, while NWRG’s Westlink M7 and NorthConnex provide key orbital freight and passenger connectivity.
Transurban CEO Michelle Jablko said: “Sydney is a core market for Transurban. WestConnex, Westlink M7 and NorthConnex provide options for Sydney motorists as they move around the city and will play an important role in supporting Sydney’s growth for decades to come.
“We remain disciplined with how we allocate capital in our key markets of Australia and North America and we are committed to maintaining strong investment grade credit metrics. CPP Investments has been a long-term investment partner with Transurban, and we appreciate the deep and collaborative relationship.”
James Bryce, managing director, head of infrastructure at CPP Investments, said: “We are pleased with what has been achieved over our ownership period. These assets play an important role in facilitating the movement of people and goods across Greater Sydney and have generated significant long-term value for the CPP Fund.
“This transaction allows us to realise value from mature assets as we continue to focus on seeking investments that will help generate attractive long-term returns for CPP contributors and beneficiaries.”
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