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Business deals

GIC, Abertis Group to buy 70% stake in Mexican toll road operator

Red de Carreteras de Occidente has concessions covering 876km of toll roads

Singapore's sovereign wealth fund GIC, together with Spanish toll road operator Abertis, is taking a significant stake in Mexican toll road operator RCO. (Photo by Nozomu Ogawa)

SINGAPORE -- GIC, Singapore's sovereign wealth fund, and Spanish toll road operator Abertis Group are acquiring a 70 per cent stake in Red de Carreteras de Occidente, one of Mexico's largest toll road operators.

The stake will be sold by an affiliate of Goldman Sachs Infrastructure Partners. Local investors and Mexico's Afores pension funds will continue to hold a 30 per cent stake in RCO.

According to a statement, Abertis and GIC will form a consortium that will be majority controlled by Abertis. The Spanish group will acquire a 50.1 per cent stake from GSIP for 1.5 billion euros ($1.65 billion), which will be paid in cash and existing committed bank facilities.

The transaction is expected to close in the first half of 2020 through a tender offer. The deal gives RCO an enterprise value of 5 billion euros ($5.51 billion).

"This purchase is an important growth deal for the Abertis Group, which enters into a country that strongly promotes public-private partnerships," said Abertis Chief Executive Jose Aljaro in a statement.

Upon closure of the deal, RCO will be fully consolidated under Abertis Group's accounts.

RCO manages five concessions totaling 876 km of toll roads located in Mexico's central-western region.

DealStreetAsia is a financial news site based in Singapore focused on corporate investment activity in Southeast Asia and India. Nikkei recently acquired a majority stake in the company.

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