Brookfield Infrastructure yesterday announced a binding agreement, together with its institutional partners to acquire the entire issued capital of Asciano Limited, a high quality rail and port logistics company in Australia with an enterprise value of around A$12 billion.

The transaction has received the unanimous support of the Asciano Board of Directors and will be implemented by a scheme of arrangement under Australian law which will see Asciano shareholders receive an implied value of approximately A$9.15 per Asciano share.

Under the terms of the proposed transaction, Asciano shareholders will receive, for each Asciano share held:

• A$6.94 in cash; and
• 0.0387 Brookfield Infrastructure limited partnership units (BIP Units).

These elements combine to represent a total implied value of A$9.15 per Asciano share, made up of A$6.94 in cash and A$2.21 in BIP Units.

The transaction represents a premium of approximately 39% of the 30-trading day volume weighted average prices of Asciano shares, leading up to July 1, 2015, the date on which Asciano was required for regulatory reasons to announce that discussions in relation to the transaction were taking place.

The total implied enterprise value of Asciano under this transaction is approximately A$12 billion. The acquisition will be funded by assuming net debt of approximately A$3.1 billion, an acquisition facility of A$1.9 billion and the balance of A$6.9 billion (or US$5.1 billion) funded by equity from Brookfield Infrastructure and its partners.

Brookfield Infrastructure is investing a total of approximately US$2.8 billion, and expects to hold an ultimate ownership position of approximately 55% of Asciano upon completion of the acquisition. Its portion of the investment will be funded through a combination of BIP Units issued to Asciano shareholders under the Scheme, cash raised under a US$250 million private placement of BIP Units to Brookfield Asset Management (described below), cash on hand and drawings on Brookfield Infrastructure's revolving credit facilities.

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

"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. 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."

Asciano Chairman Malcolm Broomhead said:

"We are pleased to recommend to our shareholders this compelling transaction with Brookfield Infrastructure. Asciano's businesses are unique and highly strategic. Pacific National is one of the largest providers of above rail freight haulage services in Australia. Patrick is a leading business in bulk ports and stevedoring, with a presence in over 40 sites in Australia and New Zealand."

"The primary focus of the Asciano Board has always been, and continues to be, to act in the best interests of shareholders and maximise shareholder value. After careful consideration of all the options available to the Company, the Asciano Board has unanimously concluded that a sale of the Company at a significant premium to market value, and on terms that we think reflect fair value, is in the best interests of all shareholders."

The combination of Brookfield Infrastructure and Asciano will create a leading global rail, port and logistics business. Asciano's business is comprised of a unique 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; and
• nationwide above rail haulage operations with assets consisting of 664 locomotives and over 14,000 wagons which have the capacity to haul 180 million tonnes of freight and are diversified across mineral and bulk haulage, steel and intermodal.

As part of the consideration paid to Asciano shareholders under the Scheme, Brookfield Infrastructure will be issuing approximately 37.9 million BIP Units.