The Transurban Group (ASX: TCL) share price is down over 1% after announcing it was spending $4.5 billion on increasing stakes in toll roads.
Transurban is invested in a number of tolls roads in Melbourne, Sydney, Brisbane and North America. Citylink and WestConnex, as examples, are two of its most important investments.
Transurban acquisitions
The toll road business announced it’s going to buy Canada Pension Plan Investment Board’s (CPPIB) 25% interest in NorthWestern Roads Group (NWRG) and CPPIB’s interest in Sydney Transport Partners (STP).
After these transactions go through, Transurban’s ownership interests will increase to:
- 75% (up from 50%) of NWRG, which owns Westlink M7 and NorthConnex
- 60.5% (up from 50%) of STP, which owns WestConnex
Transurban noted that the acquisition will initially be funded with committed debt facilities that are expected to be refinanced into longer-term debt over time. In other words, no equity funding is required.
The ASX infrastructure share is not expected to impact FY27 free cash generation and distributions.
Transurban said that the acquisition of additional interests in Westlink M7 (the concession ends in 2051), NorthConnex (where the concession ends in 2048) and WestConnex (where the concession ends 2060) supports Transurban’s weighted average concession life.
The business said that the acquisition multiples are attractive based on historical transactions, due to the concession length and relative maturity of the three assets.
Transurban also said there will be no change to tolls or the on-road experience for NSW motorists.
The business said the acquisitions are conditional and each remain subject to ACCC clearance and other approvals. Transurban expects to complete the acquisition during the 2027 calendar year.
Tennessee commercial close
Transurban also said in a separate ASX announcement that the Drive TN Consortium (which involves Transurban) has reached commercial close to deliver Tennessee’s I-24 Southeast Choice Lances project in Nashville.
This 26-mile project will add Choice Lanes in both directions along I-24 between Nashville and Murfreesboro. The project “contemplates” future extensions to the I-24 to be developed over time.
Management comments
The Transurban CEO Michelle Jablko said:
Sydney is a core market for Transurban. WestConnex, Westlink M7 and NorthConnex provide options for Sydney motorists as they move around the city and will play an important role in supporting Sydney’s growth for decades to come.
We remain disciplined with how we allocate capital in our key markets of Australia and North America and we are committed to maintaining strong investment grade credit metrics.
CPPIB has been a long-term investment partner with Transurban, and we appreciate the deep and collaborative relationship.
Final thoughts on the Transurban share price
The Transurban share price is down 17% since June 2026. I think it’s a good time to consider investing in the business as traffic continues to grow on its Transurban’s roads. It expects to pay $0.72 per security in FY27, which translates into a distribution yield of 5.5%.
I think it’s one of the ASX dividend shares to keep an eye on and consider for income.
