The Canada Pension Plan Investment Board is moving to buy 10 per cent control of the Highway 407 toll road that operates north of Toronto for $894 million.

The board, which invests the proceeds of Canada's national pension plan, said Tuesday it has come to an agreement with Spanish multinational firm Ferrovial to buy 10 per cent of the highway, lowering the Spanish firm's ownership stake to 43 per cent.

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A sign by the elevators marks the interior of the Toronto office of the Canadian Pension Plan Investment Board, which is seeking a stake in the Highway 407 toll road. ((Ramya Jegatheesan/CBC) )

The remainder of the highway is owned by Montreal-based engineering firm SNC-Lavalin Inc., which has 17 per cent, and Australian conglomerate Intoll Group, which holds 30 per cent.

The deal is expected to be completed within two months, but both SNC-Lavalin and Intoll have the right of first refusal to buy the stake the board is seeking.

The deal is complicated by the fact that the CPP board moved, in a separate transaction in July, to buy Intoll outright, including its 30 per cent stake in 407.

If all parties agree and both transactions go through, the board would own 40 per cent of the highway, Ferrovial would own a little more than 43 per cent, and SNC-Lavalin would own slightly less than 17 per cent.

The 407 Express Toll Route Highway opened in 1997. In the first six months of 2010, traffic was up by six per cent over 2009 levels.

"Highway 407 ETR is situated strategically to ease traffic congestion and to benefit from future urban growth in Toronto," board vice-president André Bourbonnais said of the deal.

The board says infrastructure assets offer stable returns in the long term and fit strategically into its portfolio as a long-term investor. The board has repeatedly pursued infrastructure investments in recent months.

In November 2009, the CPP board made a joint offer for Australian-based toll-road operator Transurban Group. But after a revised bid in May was again rebuffed by the would-be acquiree, co-bidder Ontario Teachers' Pension Plan backed out and the deal fell apart. The CPP board retains its almost 13 per cent stake in Transurban.

The board had nearly $130 billion in assets at the end of June 2010.