The Ontario Teachers' Pension Plan agreed to buy two marine container terminals in the New York area and two in British Columbia from Orient Overseas (International) Ltd. for $2.4 billion.
The Ontario Teachers' Pension Plan, one of Canada's largest institutional investors, said the deal with Hong Kong-based Orient Overseas is still subject to Canadian and U.S. regulatory approvals.
Once the deal is completed, the terminals will nearly double the value of the plan's infrastructure and timber portfolio to $6.5 billion — about eight percent of the plan's total assets.
"This acquisition represents solid, robust assets, has little vulnerability to market or economic vagaries, and features a very attractive growth profile that we will support and will serve us well into the future," Jim Leech, senior vice-president of Teachers' Private Capital, said in a statement.
"It is well priced from an investment value perspective and offers the long-term cash flow we look for as a pension plan. We are thrilled to welcome these assets into our portfolio and are keenly focused on continuing to invest in and expand the terminals."
Combined annual sales of the operations total approximately $500 million.
The terminals involved are the New York Container Terminal on New York's Staten Island and Global Terminal and Container Systems Inc. at the port of New Jersey. The deal also includes TSI Terminal Systems Inc.'s Deltaport and Vanterm facilities on Canada's Pacific coast.
The terminals include equipment to either load shipping containers onto ships from trucks or trains or unload them from ships for transport by land to their destinations.
"We are very pleased with this outcome," Nicholas Sims, chief financial officer for Orient Overseas (International) Ltd., part of a Hong Kong-based transport and logistics group that has offices in 58 countries.
The transaction is expected to be completed by the end of the first quarter of 2007, after receiving the necessary regulatory and shareholder approvals.
OOIL's core business is a container shipping business operated by wholly owned subsidiary Orient Overseas Container Line, which is one of the leading international carriers serving China.
OOCL's ships carry freight between Asia, Europe, North America, the Mediterranean, the Indian sub-continent, the Middle East and Australia/New Zealand.
The Ontario Teachers' Pension Plan has $84 billion in assets under management and administers the pensions of Ontario's 163,000 elementary and secondary school teachers and 101,000 retired teachers.