Brookfield and Cube consortia sign acquisition of Asciano

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Brookfield and Cube consortia sign acquisition of Asciano

Brookfield Infrastructure, together with its institutional partners, GIC Private Limited, British Columbia Investment Management Corporation and the Qatar Investment Authority, and Qube Holdings Limited, along with its institutional partners, have announced a binding agreement to implement a transaction that will result in the acquisition of the entire business currently owned and operated by Asciano Limited with an enterprise value of approximately A$12 billion (US$9.133 billion). 

Asciano's business is comprised of a network of port and rail assets in Australia that include:

  • Container terminal operations in major Australian cities including Sydney, Melbourne, Brisbane and Perth that have a capacity of approximately 4.9 million TEUs
  • Port, terminal and supply chain services that support shipping lines, importers, exporters, freight forwarders and customs brokers
  • Nationwide above rail haulage operations with assets consisting of 664 locomotives and over 14,000 wagons which have the capacity to haul 180 million tones of freight and are diversified across mineral and bulk haulage, steel and inter-modal

    The key terms of the transaction are outlined as follows:

    • All-cash consideration of A$9.28 (US$7.06) per share, inclusive of already announced A$0.13 (US$0.1) per share interim dividend
    • Acquisition of the ports business for A$3.84 billion (US$2.92 billion), cash and debt free:
      • The Brookfield Consortium and the Qube Consortium will acquire the Patrick terminals business on a 50/50 basis for A$2,915 million
      • The Brookfield Consortium will acquire 100% of BAPS for A$925 million
    • Acquisition of the rail business:
      • 76% by certain institutional partners of the Qube Consortium (excluding Qube)
      • 24% by certain institutional partners of the Brookfield Consortium (excluding Brookfield)

    As part of the above transaction, Brookfield Infrastructure has committed to invest a minimum of US$350 million from its current liquidity into Asciano’s high quality ports business.

    The transaction price for Asciano shareholders represents a premium of approximately 41.0% to the undisturbed volume weighted average price of Asciano shares during the five days leading up to and including June 30, 2015, the date prior to which Asciano announced that discussions in relation to Brookfield Infrastructure’s original offer were taking place. 

    Sam Pollock, Chief Executive Officer of Brookfield Infrastructure, said:

    "We are pleased to deliver a joint transaction that is on an all-cash basis and clearly superior to any previous offer. In addition, our transaction has been structured with a view to eliminating many of the issues associated with the prior offers, and therefore delivering a high degree of transaction certainty for Asciano shareholders. We are also pleased to partner with Qube in the ownership of the container terminals. With this new transaction, we will globalize our container terminal business, and expect to have opportunities for further optimization given Qube’s expertise in the 
    Australian logistics industry and its history with these assets.”

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