Haynes and Boone Advises in Complex Joint Venture to Invest $2.1 Billion in Mexico Infrastructure Assets

10/08/2015

Haynes and Boone acted as counsel to a group of leading Mexican institutional investors in their $2.1 billion joint venture (through a CKD vehicle) with Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ) for investments in Mexican infrastructure.

The transaction was arranged by Barclays Capital Casa de Bolsa and marks the first time that a foreign pension fund manager has partnered with Mexican pension fund managers with respect to investments in Mexico.

The Mexican institutional investors advised by Haynes and Boone  -- Afore XXI-Banorte, Afore Sura, Afore Banamex, government pension fund Pensionissste and infrastructure fund Fonadin -- have committed about $1.03 billion to the joint investment platform. CDPQ has committed approximately $1.07 billion.

Haynes and Boone also represented the Mexican investors in the first investment by the joint investment platform: the approximately $200 million acquisition from ICA, the largest infrastructure company in Mexico, of a 49 percent stake in ICA Operadora de Vías Terrestres (OVT).  ICA has retained 51 percent of OVT, giving rise to a joint operational platform dedicated to transportation projects in Mexico that initially includes four toll roads. 

CKDs are hybrid instruments through which investors, including regulated private pension funds that invest Mexican employees’ federal mandatory pension savings -- managed by their respective regulated fund managers known by their Spanish language acronym, “Afores” – make equity investments.

CKD Infraestructura Mexico, which was formed for this transaction, is not only the largest CKD ever at over MXN$17 billion in capital commitments, but is also unique on several other fronts, including its link to CDPQ and the synergies expected from the combination of CDPQ’s expertise and the deep Mexico-specific knowledge of the Mexican participants. Owing to these unique features and the nature of the overall transaction, the role of Haynes and Boone in the formation of the CKD was significantly broader than would be associated with investors’ counsel in typical CKDs.

The Haynes and Boone team was led by Mexico City Partner Jorge Labastida (who previously led the Haynes and Boone team that advised Afore XXI-Banorte in its US$1.8 billion acquisition of Afore Bancomer, named 2013 M&A Deal of the Year by LatinFinance Magazine). The team included Associate Gerardo Adame and Counsel Rafael Carmona. Mexico City Partner Edgar Klee and Associates Mauricio Reynoso and Fernanda Ruizesparza advised on tax matters.

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Nathan Koppel
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