The Transurban Group (ASX: TCL) share price is climbing higher following the release of an announcement.
In morning trade the toll road operator's shares are up 1% to $14.24.
What did Transurban announce?
This morning Transurban provided the market with a trading update and announced an agreement to sell a 50% interest in its Transurban Chesapeake assets.
In respect to the latter, the company has agreed to sell the 50% stake to AustralianSuper, Canada Pension Plan Investment Board, and UniSuper for gross sale proceeds of A2.8 billion (US$2.1 billion).
The deal also includes a potential earn-out between FY 2024 and FY 2026 of up to A$93 million (US$70 million).
In addition to this, its Chesapeake partners have exclusive development rights to invest alongside Transurban on future brownfield and greenfield growth opportunities in the Commonwealth of Virginia, State of Maryland and Washington D.C., as well as enhancements to existing concessions.
What are the Chesapeake assets?
Transurban's Chesapeake assets comprise its Greater Washington Area (GWA) operational assets, which include the 495 Express Lanes, 95 Express Lanes, and 395 Express Lanes.
There are also three projects in delivery and development. These are the Fredericksburg Extension, 495 Express Lanes Northern Extension, and the Capital Beltway Accord.
Transurban's Chief Executive Officer, Scott Charlton, believes the realisation of the long-held capital strategy will position its North American business for the next stage of its growth.
He commented: "This transaction realises significant value for security holders while enabling accelerated growth in North America and Australia, where we see a number of opportunities starting to materialise. The Transurban Chesapeake partners are committed to growing alongside Transurban in North America and we look forward to pursuing new opportunities with their financial and strategic support."
Trading update.
The release also reveals that despite the ongoing impacts of COVID-19, as a whole, traffic on its toll roads increased through October and November.
On CityLink in Melbourne, traffic has shown progressive improvement as government restrictions have been gradually eased over the period.
Things aren't quite as positive in North America. Traffic on its North American roads remains subdued given the continued impacts of COVID-19. This is particularly the case on its Express Lanes assets.
Also of note, in Sydney, the NorthConnex tunnels opened to traffic on 31 October.
