CPPIB, Ontario Teachers’ Pension Plan buy stake in Mexican toll road for $1.3B

MEXICO CITY—The Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan are buying a 49 per cent interest in a toll road outside Mexico City.

The first stage of a new partnership with Mexican infrastructure development company Impulsora del Desarrollo y el Empleo en America Latina (IDEAL), the two Canadian pension funds will pay $1.35 billion for the minority stake in the Autopista Arco Norte toll road. Under the agreement, the CPPIB will own a 29 per cent interest in highway, which skirts Mexico City, while the Ontario Teachers will control a 20 per cent stake.

“Arco Norte represents our first infrastructure investment in Mexico and enables us to invest in an established, modern toll road of significant size alongside IDEAL and Ontario Teachers’,” Cressida Hogg, managing director and Head of Infrastructure at the CPPIB, said. “This investment fits well with CPPIB’s strategy to invest in core infrastructure assets with long-term, stable cash flows in key global markets. We look forward to building our relationship with the partners.”

Bypassing the Mexican capital, Arco Norte stretches 223 kilometres to connect Mexico City with the states of Puebla, Hidalgo and Queretaro, linking the city to numerous trade corridors.

Building on this initial investment, the CPPIB and the Ontario Teachers said they plan to use the new partnership as a springboard for more further investments in Mexican infrastructure.

The deal remains subject to customary closing conditions.