GLOBAL Infrastructure Partners (GIP) and the Abu Dhabi Investment Authority (ADIA) have agreed to acquire a 72.5% equity interest in European wagon leasing company VTG Aktiengesellschaft from Morgan Stanley Infrastructure Partners (MSIP) and Joachim Herz Stiftung (JHS).
VTG, based in Hamburg, has Europe’s largest fleet of privately-owned wagons, totalling 88,500 vehicles. The transaction values the company at approximately €7bn.
The shares being acquired are split between the 57.5% held by Deodoro Holding, a subsidiary of funds managed by MSIP, and 15% of direct shares held by JHS. Canadian public pension fund Omers will retain its 27.5% stake in VTG.
GIP is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. Chairman and CEO, Mr Adebayo Ogunlesi, says the transaction is aligned with GIP's energy transition and decarbonisation strategy, and highlights the “significant government support for the European rail sector as one of the most cost-effective tools for delivering on net zero emissions targets.”
“We are excited by this investment and the opportunity to leverage GIP's deep industry expertise in the rail sector to build on a market-leading European transport infrastructure platform,” he says.
ADIA is a globally-diversified investment institution that invests funds on behalf of the government of Abu Dhabi. Mr Khadem AlRemeithi, executive director of the Infrastructure Department at ADIA, says growth in the European rail freight market and modal shift to rail is a key enabler of decarbonising supply chains.
“This investment in VTG aligns with our continued focus on pursuing infrastructure opportunities backed by strong energy transition-related tailwinds,” he says. “For this transaction we have worked hand in hand with GIP, a long-standing partner, to invest in a market-leading business with an established track record.”
MSIP received financial advice from Goldman Sachs and Crédit Agricole Corporate & Investment Bank as well as legal advice from New York-based law firm Sullivan & Cromwell (S&C). S&C also supported MSIP with the public takeover of VTG in 2018, a delisting in 2019, and a restructuring, including a squeeze-out of all minority shareholders followed by an ongoing appraisal proceeding.