The Caisse de dépôt et placement du Québec building in Montreal on Feb. 7, 2020.Christinne Muschi/The Globe and Mail
Canadian pension fund giant Caisse de dépôt et placement du Québec is deepening its presence in Europe’s rail transport industry with the purchase of Akiem, a freight locomotive-leasing business jointly owned by France’s state-owned railway company SNCF and German asset management firm DWS Group.
Caisse de dépôt’s offer was chosen by Akiem shareholders after an auction for the business and the pension fund will now start exclusive negotiations with Akiem’s owners toward finalizing a sale, the companies said in a joint statement Monday. The Caisse offer is subject to consultations with employee groups at both SNCF and Akiem, as well as the approval of certain competition authorities, the companies said.
No purchase price was disclosed. French financial daily Les Echos previously reported that Akiem attracted bids ranging from €2.5-billion to €3-billion (about $3.2-billion to $3.9-billion at current exchange rates), from suitors that also included U.S. investment bank J.P. Morgan and French infrastructure fund Vauban.
The acquisition adds another big piece to the Caisse’s expanding asset base in European rail as the pension fund bets that trains will deliver long-term returns and growth opportunities at a time of heightened awareness of eco-responsible travel and cargo transport. The Caisse last year bought the SNCF’s freight railcar-leasing company Ermewa Group in a joint purchase with DWS and is also the biggest shareholder of French train maker Alstom SA.
“With three quarters of its fleet already operating on electricity, Akiem offers a sustainable response to the challenges of decarbonizing transport – a solution that appealed to us from the start,” Emmanuel Jaclot, head of infrastructure at the Caisse, said in the statement.
Akiem has the largest rail-leasing fleet in Europe, with about 600 locomotives, 46 passenger trains and 250 employees. It generated earnings before interest, taxes, depreciation and amortization of €150-million ($197.5-million) in 2021 on revenues just shy of €220-million ($289.7-million).
On the passenger side, the Caisse is also heavily involved as minority shareholder in Eurostar Group, a holding company controlled by the SNCF now working on merging the Eurostar and Thalys high-speed rail networks in a project dubbed “Green Speed.” The partners are aiming to boost ridership from 18 million customers carried in 2019 to 30 million a year by 2030.
Green Speed was initiated in September, 2019, but postponed because of the COVID-19 pandemic. It was then relaunched in the fall of 2021 and received approval from the European Commission this past March.
Montreal-based Caisse de dépôt has come under heavy criticism in recent weeks for its investment in another sector of the economy: new technology.
The pension fund manager has acknowledged that its US$150-million ($192.6-million) investment in Celsius Network is souring because the New Jersey-based cryptocurrency lender is mired in bankruptcy protection. The Caisse has yet to explain why it moved ahead with the investment given financial watchdogs in states such as Kentucky, Texas, and New Jersey had taken regulatory action against the digital-asset company by the time the deal was announced last October.
The Caisse will report results for the first half of this year later this month.
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