Transurban has agreed to acquire additional ownership interests in three major Sydney toll-road assets from the Canada Pension Plan Investment Board (CPP Investments/CPPIB) for a total cash consideration of approximately A$4.5 billion (US$3.13 billion). The transaction covers CPPIB’s 25% interest in NorthWestern Roads Group (NWRG) and its 10.5% interest in Sydney Transport Partners (STP). 

Through the acquisition, Transurban’s ownership of NWRG will rise from 50% to 75%. NWRG owns Westlink M7 and NorthConnex, two important motorways serving Greater Sydney. Westlink M7 provides a major orbital connection between Sydney’s north-west and south-west, while NorthConnex is a 9-kilometre twin-tunnel motorway linking the M1 Pacific Motorway with the Hills M2. Transurban will also increase its ownership of Sydney Transport Partners (STP) from 50% to 60.5%. STP owns WestConnex, one of Sydney’s largest motorway networks, connecting western and south-western Sydney with the CBD, Sydney Airport and Port Botany. CPPIB’s sale therefore gives Transurban a greater economic interest in a strategically important part of Sydney’s road network. 

The acquisition is intended to strengthen Transurban’s long-term infrastructure portfolio. The company said the transaction is expected to be value accretive and provide increasing benefits to free cash flow per security over the medium and long term. The investment is particularly supported by the addition of the M5 West to the WestConnex concession and the future opening of the Western Harbour Tunnel. 

The transaction will initially be financed through committed debt facilities, which Transurban expects to refinance into longer-term debt over time. Importantly, the company said no equity funding is required and that the acquisition is not expected to affect FY2027 free cash flow or distributions. Completion is subject to various conditions and approvals, with the transaction expected to be completed during 2027. The roads involved have long concession periods, making the acquisition strategically significant for Transurban. The concession for Westlink M7 runs to 2051, NorthConnex to 2048 and WestConnex to 2060. Increasing its ownership in these assets therefore gives Transurban greater exposure to long-term toll-road revenues across Sydney.