Hochtief, a German holding company with projects in construction and civil engineering for the energy, mining, transportation and urban infrastructure industries, offered almost € 19 Bn ($ 20 Bn) to acquire Abertis Infrastructuras SA, a transportation support services company. Based in Spain, Abertis owns and operates highways in addition to managing toll roads and telecommunication infrastructure.
With its bid,
cash-rich Hochtief, 72% owned by ACS, topped a rival offer from Atlantia SpA, an Italian holding company that provides toll motorway operation services, and is trying to expand and diversify internationally. Earlier this year, Atlantia offered Abertis shareholders €16.3 Bn. The merger would have created the largest toll-road operator with 14,095 km under management in 19 countries.
Hochtief aims to complement its development and construction operations with Abertis’ operation and maintenance of infrastructure. It was rumoured that Hochtief’s bid is backed by the Spanish government through ACS because of the “politically sensitive” Spanish motorway concessions. Hochtief’s CEO, Marcelino Fernandez Verdes, denied such rumours, arguing the move is purely strategic, and the acquisition will “generate value throughout the entire infrastructure project lifecycle”. Atlantia’s management stated the company is ready to improve its bid, which means that a takeover battle is probable.
To fund the acquisition, Hochtief plans to pay 80% in cash and the rest in shares with an exchange ratio of 0.1281 (Hochtief shares for 1 Abertis share). The company has secured financing of € 15 Bn at 2% interest rate and is planning to issue shares, thereby diluting the share of ACS ownership to below 50%.
The proposed deal is expected to be accretive and to generate cost synergies with a present value up to between € 6 and € 8 Bn.
The deal is complicated by the political uncertainties in Catalonia, where a quarter of Abertis’ assets are located. The company recently transferred its legal headquarters to Madrid from Barcelona.
