October 11, 2019 / 1:27 PM / 4 days ago

Atlantia unit to buy 1.5 billion euro majority stake in Mexico's RCO

FILE PHOTO: Toll road operator Abertis´headquarters is seen in Barcelona, Spain, October 9, 2017. REUTERS/Eric Gaillard/File Photo

MILAN (Reuters) - Atlantia’s (ATL.MI) Spanish unit Abertis has agreed to pay 1.5 billion euros ($1.7 billion) for a majority stake in Mexican toll road operator Red de Carreteras de Occidente (RCO) as part of a drive to expand in high-growth potential countries.

Atlantia, which is controlled by Italy’s Benetton family, said on Friday that it had agreed with Singapore sovereign wealth fund GIC to buy a combined 70% stake in RCO from Goldman Sachs Infrastructure Partners.

Under the deal Abertis will take a 50.1% stake while GIC, already an Atlantia shareholder, will acquire the remaining 19.9%.

Atlantia Chairman Fabio Cerchiai said the acquisition was part of Abertis’s strategy of focusing on countries in Central and South America and helped to “reinforce Atlantia’s role as the world leader in the infrastructure sector”.

The deal is expected to close in the first half of next year after a tender offer is launched for the remaining 30% of RCO held by Mexican pension funds, the company said.

Atlantia said Abertis and GIC would take a further 6% at most following the offer.

RCO manages five concessions in central-western Mexico, covering 876 km of toll roads.

Abertis said the Mexican assets would have added about 375 million euros to its core profit last year had they been consolidated.

Reporting by Elisa Anzolin; Writing by Stephen Jewkes; Editing by David Goodman

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