Hampton Roads operator of Downtown and Midtown tunnels sold in $2B+ deal

Elizabeth River Crossings was acquired by a Spanish toll road operator and John Hancock Life Insurance Co.

Published November 9, 2020 by Rich Griset

Elizabeth River Crossings HoldCo LLC, the operator of the Downtown and Midtown tunnels that run between Norfolk and Portsmouth, has been sold to Abertis Infraestructuras S.A. and Manulife Investment Management Ltd., on behalf of John Hancock Life Insurance Co., for more than $2 billion.

Elizabeth River Crossings operates four tunnels and a highway in the Norfolk area, and its transportation infrastructure is used by more than 100,000 vehicles for daily commutes. Joint owners Skanska and Macquarie Infrastructure Partners II have agreed to sell their stakes in Elizabeth River Crossings for a combined $1.25 billion. The new owners will also assume ERC’s net debt of $1.2 million.

Abertis is a Spanish toll road company. Toronto-based Manulife Investment Management, a long-term institutional infrastructure investor, reached the agreement on behalf of John Hancock Life Insurance Co., a Boston-based subsidiary of Manulife and a consortium member with Abertis.

According to a statement from Abertis, the acquisition of these assets is “a further important step in Abertis’ growth strategy in the key target market of the United States, one of the most important markets for infrastructure investment in the world.” Abertis will have control of the company.

Elizabeth River Crossings was established by Skanska and Macquarie Infrastructure Partners II, a fund managed by Macquarie Infrastructure & Real Assets (“MIP II”) in 2012 as part of a public-private partnership with the Virginia Department of Transportation. The partnership was formed to rehabilitate the existing Downtown and Midtown tunnels, construct a new, parallel Midtown Tunnel and extend the Martin Luther King Freeway to Interstate 264. The partnership saw Elizabeth River Crossings assume all tolling, operations and maintenance of these facilities through 2070. The construction of the new Midtown Tunnel was completed by a Skanska-led construction joint venture in 2016, almost a year ahead of schedule.

“This acquisition is a further step in the ambitious growth strategy of the Abertis Group, with the acquisition of a solid platform in the United States, a country that offers a strong commitment to public-private partnerships and to the concession framework,” Abertis CEO José Aljaro said in a statement.

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