Canada pension buys stake in New Zealand airport

The C$119 billion Canada Pensions Plan Investment Board delivers on its promise of direct infrastructure investments after New Zealand shareholders approve a bid for almost 40 percent of Auckland International Airport.

Canada’s second-largest pension plan, the Canada Pensions Plan Investment Board, has won its bid to take a minority stake in Auckland International Airport in a deal worth an estimated C$1.4 billion ($1.4 billion; €907 million).

Just under a third of shareholders in the New Zealand airport agreed to CPPIB’s offer of offer of NZ$3.6 ($2.9; €1.8) per share for a 39.2 percent stake, a statement said today.

The C$119 billion Canadian fund first approached Auckland airport in September 2007, however their bid was rejected by the board of directors three months later. That was followed by a governmental ruling which allowed regulators to block foreign owners from trying to take control of local strategic assets.

Today, the pension fund said in a statement it had voluntarily reduced its voting power and ability to nominate board directors in an effort to “reinforce the fact that CPPIB will not have control over Auckland International Airport in any respect”.

CCPIB head of infrastructure Graeme Bevans added: “It has always been our objective to hold a minority stake in Auckland Airport and we have structured our offer to reflect this.  It is our desire to be a cornerstone, long-term minority investor of Auckland International Airport and our investment will assist New Zealanders in maintaining control of this important strategic asset.” 

Real estate and infrastructure have become a growing part of CCPIB’s asset allocation, with the Toronto-based company last month saying it planned to add C$1 billion ($1 billion) to its real estate investments in Asia over the next year to 18 months. Around C$2.5 billion ($2.5 billion) is invested in infrastructure.

As reported on PERE, CPPIB said Asia represented “an increasing portion of the global capital markets” with direct investment in infrastructure projects a key strategy of the pension plan.