CDPQ and Hermes to buy 40% stake in Eurostar

CDPQ and Hermes to buy 40% stake in Eurostar

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Patina Rail, a consortium comprising Caisse de dépôt et placement du Québec (CDPQ) and Hermes Infrastructure, part of Hermes Investment Management, has announced that they have agreed to acquire a 40% shareholding in Eurostar International from the UK Government for £757.1m.

CDPQ and Hermes Infrastructure intend to own 30% and 10% of Eurostar respectively. Eurostar’s other shareholders will comprise Société Nationale des Chemins de Fer Français (“SNCF”) (55%) and Société Nationale des Chemins de Fer Belges (“SNCB”) (5%).

Completion of the transaction remains conditional upon SNCF receiving clearance from the European Commission under the EU Merger Regulation and the transaction receiving clearance from the German Federal Cartel Office.

Macky Tall, senior vice-president, private equity and infrastructure, CDPQ, said: “Alongside leading industry players, we are becoming partners of a highly strategic asset that will generate stable and predictable returns for our clients. This major investment is another opportunity for us to further build on our expertise in the transport sector, while broadening our footprint in the global marketplace. 

"In terms of reliability and satisfaction, Eurostar is state-of-the-art and among the most enviable worldwide. It serves as a model for operational efficiency and we intend to be a partner in its growth for many years to come.”

"It’s great that we have reached an agreement to sell the UK’s shareholding in Eurostar that delivers a fantastic deal for UK taxpayers that exceeds expectations," said Chancellor of the Exchequer, George Osborne.

"Investing in the best quality infrastructure for Britain, getting the best value for money for the taxpayer and tackling our country’s debts are key parts of our long term economic plan, and in today’s agreement, we are delivering on all three."

SNCF and SNCB have the option to acquire the UK Government’s 40% shareholding for a 15% premium to the agreed price. Closing of the transaction is conditional on SNCF and SNCB not exercising this pre-emption right. It is anticipated that the transaction will close during the second quarter of 2015.

“Eurostar is a high quality asset providing a direct link between the UK and Europe that has historically offered attractive investment characteristics, including long-term stable and predictable cash flows. We look forward to creating a long-term partnership with SNCF and SNCB and other key stakeholders in relation to this important investment,” said Peter Hofbauer, head of Hermes Infrastructure.




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