Canadian pension funds take 49% stake in Mexican toll road
June 10, 2016
Two of Canada’s largest pension funds have bought a stake in one of Mexico’s biggest toll road concessions from an infrastructure company controlled by billionaire Carlos Slim.
Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan have invested $1.35-billion for a 49-per-cent stake in the Arco Norte toll road, a 223-kilometre road that connects the states of Mexico, Puebla, Hidalgo and Queretaro and is a link to major trade corridors.
“Arco Norte represents our first infrastructure investment in Mexico and enables us to invest in an established, modern toll road of significant size,” Cressida Hogg, CPPIB’s global infrastructure head, said in a statement on Thursday.
The deal will see the three groups create a strategic partnership in which Slim’s Ideal will hold 51 per cent, with CPPIB having a 29-per-cent stake and Ontario Teachers’ taking 20 per cent. The partnership could be used for further investments in Mexican infrastructure in the future.
“The focus of this deal is on Arco Norte. We’re happy to be in partnership with Ontario Teachers’ and Ideal but we came together to form this vehicle so that ourselves and Teachers’ could invest in Arco Norte,” Hogg said in an interview.
“Clearly there are other opportunities in Mexico, but I think we’ll consolidate this investment that we’ve made and continue to get to know our partners Ideal better. It may be that other opportunities come up down the track, but at the moment we’re just very happy to have done this deal,” she said.
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