Toll road titan
Spanish toll road operator Abertis announced this seek that it will merge with Italian company Autostrade in a $17 billion deal. The deal will make for a dominant #1 player in the growing private toll road business. It is also another example of the increase in cross-border acquisitions, even in notoriously protectionist Italy.
The new company will reportedly have operations in 16 countries In Europe, North and South America. Aside form toll roads, the company operates parking lots and airports, even some telephone operations in Spain. As reported in a Wall Street Journal article ("European Acquisition Creates Toll-Road Giant", 4/24/06):
The industry is considered stable because income from toll roads tends to grow slowly but steadily, with substantial sales and profit growth from obtaining new concessions or installing systems like automated toll collecting.
Abertis was established in 2003 from the merger of two Spansih highway construction and management companies, Acesa and Aumar, In 2003 the company bought Spanish company retevisión, Spain's leading broadcast infrastructure company. The company also increased telwcom infrastructure operations (towers and network management) . In 2005, Abertis bought British airport operator TBI, which runs eight airports in Europe, the US, and Bolivia. The company also has extensive car park operations in Spain and Italy.
Autostrade SpA, founded in 1950, runs over 60% of Italy's extensive toll road network. It was a pioneer in electronic payment on toll roads. It also has operations (construction and/or management) in the UK, Canada, Australia, and Austria. It currently opeates the Greenway, a toll road that runs from Washington D.C. to Dulles Airport.
The nnew company has a major opportunity in the increasing privatization of US toll roads. 19 states have now made some kind of private-poublic partnertship and more are considering it, mostly to get upfront cash Fior example, as an API news article ("Privatization of US Toll Roads and Other Infrastructure Gaining Speed", notes:
Public-private partnerships in toll road projects like the Chicago Skyway, where the City of Chicago granted a 99-year lease to Cintra Concesiones de Infraestructuras de Transporte (Cintra) and Macquarie Infrastructure Group to operate, maintain, manage, rehabilitate and toll the Skyway, infused $1.83 billion into that city's coffers.
The sell-off of what used to be public infrastructure servics to private means is a big opportunity and like seaport opeations and airport operations, road infrastructures are become more and more globalized.
