Darwin to Tarcoola railway line operator acquisition

A consortium of multinational companies has acquired Genesee & Wyoming Inc. (G&W), which owns rail assets in three Australian states and territories, for an estimated US$8.4 billion.

Brookfield Infrastructure, GIC and Brookfield Infrastructure’s institutional partners form the consortium that will acquire G&W.

The transaction is valued at approximately $8.4 billion.

G&W owns a portfolio of 120 short line railroads, predominantly in North America, with operations in Europe and Australia. Through its subsidiaries worldwide, the business provides transportation infrastructure services over more than 26,000km of track, providing access to its well-diversified customer base.

Genesee & Wyoming Inc. (G&W) owns or leases 120 freight railroads organised in eight locally managed operating regions with approximately 8,000 employees serving 3,000 customers.

G&W’s Australia Region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile-long Tarcoola-to-Darwin rail line.

The Australian 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.

The new consortium

Brookfield Infrastructure Partners is a leading global infrastructure company that owns and operates assets in the utilities, transport, energy and data infrastructure sectors across North and South America, Asia Pacific and Europe.

Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a leading global alternative asset manager with over $365 billion of assets under management.

GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. Headquartered in Singapore, GIC has investments in over 40 countries.

Jack Hellmann, G&W Chairman and Chief Executive Officer, expressed his excitement for acquisition.

“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,” Mr Hellmann said.

“They are also fully supportive of our business plan, which will continue to be focused on safety, customer service, and growing our footprint to provide more opportunity for our people.

“We also expect this transaction will allow us to further enhance our business as we benefit from Brookfield Infrastructure/GIC’s expertise in real estate and technology, as well as relationships with their rail-centric/complementary portfolio companies.”

Brookfield Infrastructure’s investment will be approximately $500 million of equity. The remainder of the business will be owned by Brookfield Infrastructure’s institutional partners and GIC.

Brookfield Infrastructure’s investment will be funded from existing liquidity which totalled approximately $1.9 billion at June 30, 2019.

The transaction is expected to close by the end of 2019 or early 2020 and is subject to customary closing conditions, including approval by G&W stockholders holding 66.66 per cent of the outstanding common stock, and required regulatory approvals.

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