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Macquarie Weighs $2 Billion Sale of Virginia Toll Tunnels

Macquarie Weighs $2 Billion Sale of Virginia Toll Tunnels

(Bloomberg) -- Macquarie Group Ltd. and Skanska AB are weighing the sale of the Elizabeth River Tunnels, a toll road concession in southeastern Virginia that could fetch more than $2 billion, according to people familiar with the matter.

Macquarie Infrastructure and Real Assets, the Australian bank’s infrastructure-investing arm, and Skanska are interviewing potential advisers ahead of a sale process for the project that could start next year, said the people, who asked to not be identified because the matter isn’t public. Skanska is a Stockholm-based construction company.

The toll road is expected to draw interest from corporate buyers, pension funds and infrastructure funds, the people said. Many of the latter have amassed billions of dollars in capital to spend on North American infrastructure -- specifically, transportation, communications, energy and waste assets.

“It is the policy of both Skanska and Macquarie not to comment on the divestment potential for individual assets,” the firms said in a joint statement. “The companies are continuously evaluating strategic alternatives for mature projects where construction is complete and operations are stable. If and when there is an agreement to sell an asset, the companies would make a formal disclosure to the market.”

As part of a partnership with the Virginia Department of Transportation, Macquarie and Skanska have the right to operate the toll road until 2070, according to Skanksa’s website. Road improvements began in 2012 and tolling was put in place in 2014 for the route, which connects the cities of Portsmouth and Norfolk.

While there has been a dearth of toll road dealmaking in the U.S. in 2019, activity in adjacent geographies has picked up recently. In October, Abertis Infraestructuras SA and Singapore sovereign wealth fund GIC Pte Ltd. agreed to buy Goldman Sachs Group Inc.’s infrastructure arm’s majority stake in one of Mexico’s largest private toll road operators. Separately, Goldman’s infrastructure arm is exploring the sale of its stake in a Puerto Rico toll road concession, Bloomberg News reported in October.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Matthew Monks, Michael Hytha

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