Brookfield and GIC in bid for Genesee & Wyoming


One of the major rail operators in Australia could have new global ownership

Brookfield and GIC in bid for Genesee & Wyoming
GWA is a big rail freight player locally

 

Genesee & Wyoming (G&W), the International rail freight operator with a strong presence in Australia, is being bought in a US$8 billion (A$11.4 billion) deal.

The purchasers are Brookfield Infrastructure Partners (BIP) and Singapore sovereign wealth fund GIC.

"This is a rare opportunity to acquire a large-scale transport infrastructure business in North America," BIP CEO Sam Pollock says.

"G&W will be a significant addition to our global rail platform and will expand our presence in this sector to four continents. G&W provides critical transportation services to more than 3,000 customers, and its cash flows have proven to be highly resilient over many years.

"Brookfield Infrastructure is well suited to work with the company to continue to improve the business, given our significant experience owning and operating rail, ports and other large scale, transportation infrastructure businesses."


Read how news of Viterra’s GWA rail shift was greeted, here


Brookfield is already well invested in Australian logistics, holding 50-50 joint ownership with Qube of stevedore Patrick and owning DBCT Management, which runs Dalrymple Bay Coal Terminal in Queensland.

It was also a crucial player in the sale of Asciano, as was GIC.

GIC last year linked with property firm Dexus to form an Australian logistics real estate joint venture.

"As a long-term investor, GIC is confident G&W will continue to generate steady profitability, given its diversified operations and customer base," GIC chief investment officer for infrastructure Ang Eng Seng says.

"We look forward to partnering with G&W’s management and Brookfield Infrastructure to support the future growth of the company."

G&W owns a portfolio of 120 short line railroads, predominantly in North America, with operations in Europe and Australia. 

G&W’s Australia Region arm, GWA, serves New South Wales, the Northern Territory and South Australia and operates the 2,100 km Tarcoola-to-Darwin rail line.

The Australia Region is 51.1 per cent owned by G&W and 48.9 per cent owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.

It was involved in South Australian alarm in May, when agribusiness Viterra took its grain off Eyre Peninsula rail, citing cost and operational reasons.

"For our customers, employees, and Class I partners, the long-term investment horizon of Brookfield Infrastructure and GIC as seasoned infrastructure investors is perfectly aligned with the long lives of G&W railroad assets, which are integral to the local economies that we serve in North America and around the world," G&W chairman and CEO Jack Hellman says.

The deal, an offer of US$112 per share, a pre-offer premium of almost 40 per cent, is expected to close by year end or early 2020.

Jack Hellman, Hellman, Ang Eng Seng, Dexus, Infrastructure Partners, Brookfield ,BIP, Genesee & Wyoming,GWA,G&W,

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