Under the agreement a consortium of Brookfield Infrastructure, GIC, and Brookfield’s institutional partners will pay $US 112 per share in cash, representing a 39.5% premium on the unaffected share price of $US 80.28 on March 8, the day before initial media speculation on a potential transaction.
The transaction is expected to close by the end of 2020 subject to closing conditions, including approval by G&W shareholders holding 66.67% of the outstanding common stock and authorisation from the Committee on Foreign Investment in the United States and the Surface Transportation Board.
Brookfield Infrastructure’s investment will be around $US 500m of equity. The remainder of the company will be owned by Brookfield Infrastructure’s institutional partners and GIC.
In North America, the company operates 114 short line and regional railways covering more than 21,000km in 41 US states and four Canadian provinces.
G&W’s Australia Region serves New South Wales, the Northern Territory and South Australia and also operates the Tarcoola - Darwin line. The Australia Region is 51.1% owned by G&W and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
G&W also owns Dutch rail freight operator Rotterdam Rail Feeding as well as Freightliner, Britain’s largest maritime intermodal operator, which G&W acquired in 2015.
“For our customers, employees, and Class 1 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,” says G&W chairman and CEO Mr Jack Hellman. “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.”