Takeover Bid

For whom the tolls ring

It never seems like much but tolls can add up to billions each year for operators. Source: Reuters

While the handful of euros motorists pay when passing through a toll booth may seem a trivial amount of money to individual drivers, it turns out these payments add up to billions each year and they have touched off a bidding war involving multinational companies in three European countries.

German construction giant Hochtief announced on Wednesday that it has made a €17 billion ($20 billion) offer for Abertis, the operator of toll roads in Spain and other European countries as well as in South America. Including stock held by Abertis in its own company, the bid is worth €18.6 billion, topping an earlier, €15.7 billion offer from Italian toll road operator, Atlantia.

Politics may be the driving force behind Hochtief’s dramatic offer. While the Italian bid for Abertis has already been approved by Spain’s stock market regulator and the European Commission, the Madrid government had qualms about turning over a Spanish business jewel to foreign owners. While Hochtief is German, it in turn is 72-percent owned by Actividades de Construccion y Servicios or ACS, one of Spain’s biggest construction firms, so the Hochtief bid may have the inside track.

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