Brookfield Consortium is buying Australian port and rail freight firm Asciano for $6.6 billion to form a global logistics player, scooping up an asset that has been made cheaper by a slump in coal prices, to create an international rail logistics business.
Coal exports are a key generator of earnings for haulage companies like Asciano. The future of the Australian coal industry is expected to defy global pressure on high polluting energy sources and grow exports in the years ahead.
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The consortium comprises Brookfield Infrastructure, which will invest $2.8 billion to acquire approximately 55 percent stake in Asciano, while the other Brookfield-sponsored and managed private funds will hold approximately 23 percent, and two institutional partners will each hold approximately 11 percent.
Bermuda-based Brookfield Infrastructure in a statement Monday said it plans to list its units on the Australian Stock Exchange and has already received “in principle approval” from the ASX, subject to certain conditions.
“This transaction enables us to acquire premier transport infrastructure assets in a geography we know well and establish two leading global platforms, with solid long-term prospects, ” said Sam Pollock, CEO of Brookfield Infrastructure. “Combining Asciano’s Australian container terminals with our existing assets in North America and Europe provides the foundation for a global container platform. In addition, Asciano’s leading above-rail operations, together with our Australian and Brazilian logistics businesses, create a powerful, international rail logistics business.”
Adding to Asciano’s appeal, the Sydney-listed company also on Tuesday beat analyst expectations with a 19 percent jump in underlying net profit for the year to end-June due to the benefits of a US$2.20 billion overhaul aimed at automating its equipment, Reuters reports.
Reuters adds that Asciano’s shares have traded below Brookfield’s offer price since it first disclosed the Canadian company’s approach on July 1. On Tuesday, the shares rose nearly 8 percent to an intra-day peak of A$8.75 (US$6.42) their highest since 2008, but still below the offer price of A$9.15 (US$ 6.72).