Transurban offloads half its US toll-road assets for $2.8b

Transurban offloads half its US toll-road assets for $2.8b

Transurban has struck a deal to sell half of the toll-road operator's Chesapeake assets in the US for US$2.1 billion ($2.8 billion).

The previously announced deal is aimed at freeing up capital for Transurban to pursue further opportunities in the US. It's also aimed at shoring up the group's balance sheet in the face of disruptions to traffic volumes due to COVID-19.

The company revealed today that traffic volumes on its North American roads remains subdued, particularly on the Express Lanes assets.

Transurban's existing partners in Australia - AustralianSuper, Canada Pension Plan Investment Board (CPP Investments) and UniSuper will acquire a 50 per cent stake in the US assets and they have agreed to a potential earn-out of up to US$70 million ($93 million) for Transurban between FY24 and FY26.

Transurban Chesapeake comprises Transurban's assets in the greater Washington state area, including the 495 Express Lanes, 95 Express Lanes and 395 Express Lanes, as well as three projects in delivery and development. These are the Fredericksburg Extension, 495 Express Lanes Northern Extension and the Capital Beltway Accord.

The institutional investors are already partnered with Transurban by holding stakes in Transurban Queensland, which owns the Clem 7 tunnel, Gateway Motorway and Logan Motorway, and in Sydney's Eastern Distributor, the NorthWestern Roads Group and WestConnex.

The US deal provides the partners with exclusive development rights to invest alongside Transurban on future brownfield and greenfield growth opportunities in the Virginia, Maryland and Washington D.C. in the US.

"We are pleased to welcome our partners AustralianSuper, CPP Investments and UniSuper in Transurban Chesapeake and continue the excellent working relationship we have already established with each of them in our Australian markets," says Transurban CEO Scott Charlton.

"This transaction realises significant value for security holders while enabling accelerated growth in North America and Australia, where we see a number of opportunities starting to materialise.

"The Transurban Chesapeake partners are committed to growing alongside Transurban in North America and we look forward to pursuing new opportunities with their financial and strategic support."

The deal is expected to be finalised by the end of FY21.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

New report reveals 68 per cent of businesses are vulnerable to a cybersecurity attack

Partner Content
36 per cent of employees fear their organisation is at risk of financial losse...
SAI Global
Advertisement

Related Stories

Smartgroup shares plunge as suitor lowers takeover offer

Smartgroup shares plunge as suitor lowers takeover offer

Shares in Smartgroup (ASX: SIQ) have fallen back to where they were...

APA gets look in at AusNet for $9.96 billion takeover offer

APA gets look in at AusNet for $9.96 billion takeover offer

AusNet Services (ASX: AST) has today granted due diligence access t...

Victorian retail to reopen a week earlier, milestone set for scrapping masks and capacity limits

Victorian retail to reopen a week earlier, milestone set for scrapping masks and capacity limits

With Victoria poised to hit its 80 per cent double dose vaccination...

Victoria opening to vaccinated international arrivals from 1 November

Victoria opening to vaccinated international arrivals from 1 November

With lockdown lifting today in Victoria the state’s governmen...