Ferrovial boosts 407 ETR stake to 48.29% in C$2bn Toronto toll road deal

Ferrovial SE (BME: FER), the Spain-based infrastructure and mobility giant, has announced a major expansion of its equity in Canada‘s flagship toll highway project, 407 ETR. On June 6, 2025, the infrastructure group confirmed that it has acquired an additional 5.06% stake in 407 International Inc., the operator of the 108-kilometer toll road located in Ontario’s Greater Toronto Area. The transaction brings Ferrovial’s total ownership to 48.29%.

This latest move includes the purchase of 3.3% of common shares from affiliates of Montreal-headquartered AtkinsRéalis Group Inc., and the execution of a call option to buy another 1.76% from the same counterparty. The total consideration for both tranches stands at CAD $1.99 billion. The secondary transaction, involving the call option, is scheduled to close on June 11, 2025, pending final procedural completions.

With this deal, Ferrovial continues a decades-long strategy of investing in toll infrastructure assets with high operational margins and long concession terms. The latest acquisition solidifies its position as the largest shareholder in 407 ETR, a road used by more than three million drivers weekly.

Why Ferrovial is doubling down on Toronto’s toll road infrastructure

Ferrovial has held a significant position in 407 ETR since 1999. Originally developed as a pioneering electronic toll highway, 407 ETR has become an essential artery for the Toronto metropolitan area. The road is fully electronic, allowing for congestion-free access across a dense commuter corridor, and has long been lauded for its operational efficiency and consistent profitability.

The 407 ETR investment provides Ferrovial with a steady revenue stream insulated from many of the cyclical fluctuations seen in traditional construction segments. Institutional investors have consistently viewed the highway as a high-quality asset due to its user-demand resilience, inflation-protected tolling mechanisms, and low maintenance capex relative to other large infrastructure projects.

According to market analysts, the highway’s stable earnings profile and the potential for continued toll growth make it a compelling asset within Ferrovial’s infrastructure portfolio. The latest acquisition is seen as a move to reinforce control ahead of potential strategic upgrades or refinancing events.

Breakdown of the acquisition deal with AtkinsRéalis and its valuation implications

The acquisition was executed in two steps. First, Ferrovial purchased 25.58 million common shares, representing 3.3% of the outstanding shares of 407 ETR, for CAD $1.353 billion. Second, the group exercised a pre-negotiated call option to acquire an additional 13.67 million shares (1.76%) for CAD $637 million, with the valuation formula tied to a prior agreement.

Ferrovial is acquiring the shares through its subsidiaries—Cintra Global SE, Cintra 4352238 Investments Inc., 1535145 B.C. Ltd., and 407 Toronto Highway B.V.—each of which is tasked with managing infrastructure assets globally. The effective price tag translates to a robust valuation for the underlying highway, reinforcing the continued appetite for brownfield infrastructure assets in developed markets like Canada.

The transaction reflects a broader institutional trend: a reallocation of infrastructure equity stakes from diversified conglomerates like AtkinsRéalis toward focused financial investors and infrastructure operators.

AtkinsRéalis exits; CPP and PSP Investments shuffle positions

Concurrent with Ferrovial’s acquisition, AtkinsRéalis has divested its residual 1.7% interest in 407 ETR to Canada Pension Plan Investment Board (CPP Investments). This sale completes the engineering firm’s exit from the asset, aligning with its strategic pivot toward engineering and project delivery.

Meanwhile, CPP Investments has in turn sold a 7.51% stake in 407 ETR to the Public Sector Pension Investment Board (PSP Investments), another Canadian institutional investor. As a result of these moves, the updated shareholder structure of 407 ETR is now composed of Ferrovial at 48.29%, CPP Investments and affiliates at 44.20%, and PSP Investments at 7.51%.

Analysts interpret this reshuffling as a vote of confidence in the asset’s continued performance. Pension funds like CPP and PSP prioritize long-dated, yield-generating investments that offer protection against inflation—a profile that 407 ETR fits well due to its indexed toll pricing and volume stability.

How the 407 ETR fits into Ferrovial’s North American growth strategy

This acquisition further cements Ferrovial’s long-term North American strategy, particularly its focus on key infrastructure corridors in Canada and the United States. In the U.S., Ferrovial is involved in toll-road operations in Texas and has a significant interest in the ongoing redevelopment of JFK International Airport’s Terminal One in New York.

By moving closer to majority ownership in 407 ETR, Ferrovial enhances its influence over toll-setting policies, maintenance strategies, and potential digital upgrades—areas where the company has consistently invested. It also opens the door for closer alignment between operational decisions and Ferrovial’s broader ESG priorities, which include emissions reduction, traffic flow optimization, and digital infrastructure integration.

The 407 ETR, with its robust EBITDA margins and steady traffic volumes, acts as an anchor investment in Ferrovial’s global asset mix, offering both cash flow reliability and a strong local regulatory framework.

Legal filings under Canadian takeover disclosure regulations

In compliance with Canadian securities laws, Ferrovial and its subsidiaries have filed early warning reports under National Instrument 62-103. These filings confirm that the acquired shares are being held for investment purposes. The Acquiror—defined as Ferrovial and its direct subsidiaries—has indicated that while it may adjust its stake in 407 ETR in the future depending on market conditions and asset performance, no further acquisitions are currently planned.

The acquisition qualifies under the private agreement exemption of National Instrument 62-104, as the shares were purchased from fewer than five sellers and the consideration did not exceed 115% of fair market value, satisfying Canadian takeover exemption thresholds.

Such filings are standard practice in significant cross-border infrastructure transactions and provide transparency around deal structure, investor intentions, and post-transaction shareholding positions.

What institutional sentiment suggests for Ferrovial’s future in North America

While Ferrovial is listed on Euronext Amsterdam, Nasdaq, and the Spanish stock exchanges, its increasing capital deployment in North America signals a geographic pivot aimed at higher-return markets with regulatory stability. Its participation in the IBEX 35 index and inclusion in sustainability indices like the Dow Jones Best in Class Index position the group as both a financial and ESG-driven operator.

Institutional analysts view the increased 407 ETR stake as part of a broader consolidation trend, where operators seek tighter control of core assets. This mirrors movements by global peers in the infrastructure sector, where asset concentration and operational optimization are emerging as key post-pandemic strategies.

With inflation-linked toll revenues and a long concession duration (extending until 2098), 407 ETR will likely remain a cornerstone in Ferrovial’s portfolio for the foreseeable future. Analysts anticipate potential re-leveraging scenarios, refinancing opportunities, or even joint ventures in adjacent mobility technologies as Ferrovial further integrates its North American operations.

Outlook for 407 ETR and the North American toll road sector

Going forward, industry watchers expect traffic volumes on 407 ETR to continue trending upward in line with Greater Toronto Area’s population growth and suburban expansion. Additionally, technology-led enhancements such as dynamic pricing, vehicle classification systems, and environmental impact tracking are anticipated to become a central part of the operator’s value-add strategy.

Ferrovial’s enhanced ownership may also unlock further coordination with municipal planning and transport authorities in the GTA, enabling the toll road to act as a template for future urban mobility solutions. With growing interest from pension funds and ESG-conscious capital, assets like 407 ETR remain highly sought after in the global infrastructure landscape.

For Ferrovial shareholders and infrastructure-focused investors, the deal adds clarity to the group’s capital deployment roadmap and reinforces its commitment to long-cycle infrastructure returns.