In the bid to acquire the remaining 49% equity, Transurban is all set to buy NSW’s WestConnex road project for $11.1 Billion. The acquisition will be completed by October this year. Transurban will raise $4.22 Bn worth new funds to finance the acquisition.
Under a Master Services Agreement, the operational services of Transurban are being provided to the road project. The WestConnex project is also using the centralised facilities of Transurban’s customer and corporate systems.
The Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB) have no reservations about the acquisition deal.
Upon completion, the WestConnex road project will save approximately 40 minutes of commuters’ travel time between Parramatta and Sydney airport.
Scott Charlton, Transurban CEO said, “WestConnex is one of the largest road infrastructure projects in the world with an enterprise value of $33 Bn based on this transaction.”
After the acquisition is completed, Transurban subsidiary Sydney Transport Partners’ (STP) will own 100% of the project. Confirming this news, Charlton stated, “We feel privileged to take Sydney Transport Partners’ holding in this critical asset to 100 percent. This transaction is expected to support free cash growth and distributions for Transurban security holders for the life of the concession.”
The WestConnex project is set to be financially profitable for Transurban. Due to its increased stakes in the project, Transurban is expected to be on the receiving end of more than $600 Mn until FY25. An additional $2 Bn is anticipated to be earned through a number of assets held by Transurban.