AustralianSuper and IFM Investors have agreed to pay A$16.2 billion ($12.3 billion) to the Australian state of New South Wales for a 99-year lease on the state's Ausgrid electricity distribution network.
The deal will give AustralianSuper and IFM a 50.4% interest in the grid for the life of the lease. The New South Wales government will retain a 49.6% interest.
Spokesmen for AustralianSuper, a Melbourne-based superannuation fund with more than A$100 billion in assets, and IFM Investors, a Sydney-based infrastructure asset management firm, said the 50-50 deal will leave both buyers responsible for A$8.1 of that purchase price.
Until the likely close of the deal before Christmas, no details will be forthcoming on the mix of debt and equity to be employed, said Stephen McMahon, a spokesman for AustralianSuper.
The deal will significantly boost the weight of infrastructure assets in AustralianSuper's portfolio, which now stands at just less than 10%, he said.
Rather than a deliberate asset allocation shift, the move simply reflected a decision to snap up a superior investment asset capable of providing 6 million plan participants — at AustralianSuper and IFM's more than 25 local superannuation fund owners — with attractive returns over a considerable span of time, said Mr. McMahon.
That the opportunity presented itself at all was a matter of some controversy, after Australia's government in August short-circuited a bid by Chinese investors — led by State Grid Corp. of China — on national security grounds.
That move drew a rebuke from China, with a government spokesman warning that Chinese investor interest in Australia could be harmed as a result.
Despite that warning, announcements Thursday by Ausgrid's buyers and seller alike appeared to celebrate the fact that the deal was entirely an Australian affair.
In an AustralianSuper-IFM news release, Ian Silk, chief executive of AustralianSuper, hailed “this all-Australian partnership between the millions of members of our two organizations and the NSW government.”
In a separate release by the New South Wales government, Gladys Berejiklian, the state's treasurer, said it was “great to see a completely Australian consortium investing in this asset.”
In the same news release, Mike Baird, premier of New South Wales, said the handsome price the state obtained for the 99-year lease “will help fund critical infrastructure projects as part of the government's” A$20 billion rebuilding plan for the state.
There was no indication regarding how the price paid by AustralianSuper and IFM compared to the price the Chinese consortium had been offering.