Atlantia Makes $17.8 Billion Bid for Spain's Abertis -- Update

By Giovanni Legorano in Rome and Jeannette Neumann in Madrid Features Dow Jones Newswires

Italian infrastructure group Atlantia said Monday it has launched a cash-and-share offer for Abertis SA, in a transaction valuing the Spanish company at EUR16.3 billion ($17.8 billion) that could potentially create the world's biggest toll-road operator.

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Atlantia said it would offer EUR16.50 for each share in Abertis. Alternatively, it said that shareholders in the Spanish company can receive stocks at a swap ratio of 0.697 Atlantia shares for each Abertis one.

Atlantia said the deal would create the largest global toll-road operator managing a road network of 14,095 kilometers in 19 countries. The new group would have an earnings before interest, taxes, depreciation and amortization of EUR6.6 billion and EUR2.4 billion of investments.

"Should the offer be successful, the combined group will result in a very strong cash flow generation capacity and ability to invest which, together with our unique geographic presence, will allow us to be the most suitable partner to address the needs of the relevant institutions and customers in our countries of operation," said Atlantia Chief Executive Giovanni Castellucci.

The deal, should it close, would diversify Atlantia's geographical footprint. While the Italian company is larger than Abertis, Atlantia's assets are concentrated in its domestic market. For Abertis, the deal would extend the average lifespan of its toll road concessions, which have fallen in recent years, analysts at Olivetree Financial said in a research report.

The combined company would generate most of its revenue through highway assets in France, Italy, Spain, Chile and Brazil and would likely continue with Abertis's recent strategy of selling noncore assets to become a pure-play motorway exposure, according to Olivetree Financial.

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Credit Suisse and Mediobanca are acting as financial advisers to Atlantia.

Write to Giovanni Legorano at giovanni.legorano@wsj.com and Jeannette Neumann at jeannette.neumann@wsj.com

(END) Dow Jones Newswires

May 15, 2017 06:00 ET (10:00 GMT)