Australian toll road operator Atlas Arteria Group has agreed to spend $2 billion to buy a 67% stake in the long-term lease of the Chicago Skyway.
If the transaction closes, it would mark the third time the toll road asset has changed hands since the city of Chicago first sold the 99-year lease in 2005 for $1.82 billion.
There are 81 years left on the concession, which runs out in 2104.
Two of the current owners, OMERS Infrastructure and Canadian Pension Plan Investment Board, have reportedly been looking for buyers of their respective 33.33% interests, and announced Monday that they had come to terms with Atlas on a $2.013 billion sale.
The third owner, Ontario Teachers' Pension Plan will retain its 33.33% interest and enter into a partnership with Atlas if the deal closes.
"The sale of the Chicago Skyway is a win for the city, generating a tax payment in the tens of millions of dollars," said a spokesperson for Mayor Lori Lightfoot. "Additionally, it proves that sophisticated global investors who can buy assets anywhere view Chicago as a great place to invest."
The Skyway, along with the Indiana Toll Road, is a prominent example of a U.S. public-private partnership based on a long-term lease of an existing asset. The city's move to set aside $500 million of the sale proceeds for its first formal budget reserve helped it win credit upgrades at the time.
The 7.8-mile toll road links the southeast side of Chicago to northwest Indiana. It reportedly generates more than $100 million a year in toll revenue. The concessionaire is allowed to raise rates, which are currently $5.90 per car, by 2% annually or at the rate of inflation, whichever is higher.
The original consortium that bought the asset from the city included Cintra and Macquaire Group. Atlas was part of Macquarie at the time, and has since split off. In addition to owning toll roads in Europe, Atlas also owns Virginia's Dulles Greenway.
In 2015, the Macquarie consortium
"We would like to commend SCC's management team and its partners and stakeholders who have enhanced Skyway, and positioned it to play a key role in keeping the flow of people and goods moving efficiently in the Chicago area," said Scott Lawrence, managing director and head of infrastructure for CPP Investments, in a statement.
The transaction is subject to regulatory approvals and due diligence. Meanwhile, Atlas's largest shareholder, IFM Investors, is threatening to try to derail the acquisition.
IFM, which owns more than 15% of Atlas, said Monday that the purchase at the sale price would "be significantly value destructive."
In the Sept. 12
In 2015, IFM's $5.72 purchase of the Indiana Toll Road lease marked the largest price tag for an existing U.S. asset and the first time that major U.S. pension funds invested in American infrastructure.
