MegaProject 1325: Transurban-led consortium to take over largest infrastructure project in Australia
- Canada Pension Plan Investment Board (CPPIB)
- Tawreed Investments Limited
- Abu Dhabi Investment Authority (ADIA)
- CIMIC Group Limited
- Industry Funds Management (IFM Investors)
Related M&A Transactions
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The Government of New South Wales, a state in the south-east of Australia, have decided to sell a 51% stake in Sydney Motor Corporation (SMC) to Sydney Transport Partners (STP), a consortium comprising Transurban, AustralianSuper, Canada Pension Plan Investment Board and Tawreed Investments, a wholly-owned subsidiary of the Abu Dhabi Investment Authority.
SMC is responsible for managing the development, construction, funding, operation and maintenance of WestConnex, a programme of infrastructure projects that aims to develop and upgrade road access in the south-west of Sydney, valued at AUD16.8 billion (US$12.1 billion).
The programme consists of three projects in development and two in operation. The widening of 7.5 km of existing M4 motorway, in western Sydney, was completed in 2017, with tolls commencing in August. A new interchange on the M5 motorway was opened to traffic in late 2016 and completed in 2017.
The projects in development are:
- 6.5km extension of the M4 via twin motorway tunnels from Homebush to Haberfield with three lanes in each direction, which will connect to the widened M4. It is expected to be completed in 2019. The project value is AUD3.8 billion (US$2.73 billion).
- Construction of 9km twin motorway tunnels to duplicate the M5 East between Kingsgrove and St Peters. Completion is scheduled for 2020, with the estimated value being AUD4.3 billion (US$3.09 billion).
- M4-M5 link: tunnels connecting the M4 East at Haberfield to the new M5 at St Peters via Rozelle and Camperdown, and an underground tunnel from the Rozelle Interchange to Iron Cove Bridge. Valued at AUD7.2 billion (US$5.18 billion), this project is currently in planning. Construction is expected to commence this year, with the road opening to traffic in 2023.
The government of New South Wales will retain the remaining 49% stake in WestConnex until it is completed in entirety.
STP initially faced competition from three other consortia interested in acquiring the stake. However, bidding teams led by Netflow and CIMIC withdrew from the process before the government's final decision. STP's remaining competition was led by IFM Investors.
The agreed purchase price is thought to be AUD9.3 billion (US$6.69 billion), with Transurban (majority shareholder) to raise AUD4.2 billion (US$3.02 billion) equity and undertake a AUD600 million (US$431.3 million) securities placement to AustralianSuper and Tawreed Investments to fund the acquisition. The transaction is expected to close in late September.