Brookfield Infrastructure has announced a binding agreement, together with its institutional partners – the Brookfield Consortium – to acquire the entire issued capital of Australian port and logistics company Asciano for a total of US$8.8 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 $65 per Asciano share.
As permitted under the ‘Scheme Implementation Deed’, if the transaction proceeds Asciano expects to pay a fully franked special dividend of up to $0.66 per share before the ‘Scheme Implementation Date’.
To the extent that a Special Dividend is paid, the cash component of the consideration will be reduced by the amount of the special dividend.
Sam Pollock, CEO 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.”
Malcolm Broomhead, Chairman of Asciano, said: “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 acquisition will be funded by assuming net debt of approximately $2.27 billion, an acquisition facility of $1.39 billion and the balance of more than $5.2 billion, funded by equity from Brookfield Infrastructure and its partners.
Brookfield Infrastructure is investing a total of approximately $2.8 billion, and expects to hold an ultimate ownership position of approximately 55% of Asciano upon completion of the acquisition.
It is anticipated that Asciano shareholder approval will be sought at a meeting to be held in mid-November 2015, and that the merger will be completed prior to year-end, subject to the various regulatory approvals.
Detailed documentation in relation to the scheme is expected to be mailed to Asciano shareholders in early October 2015.