Asciano deal moves forward

The acquisition of Australian port and rail logistics heavyweight Asciano by multinational Brookfield Infrastructure is moving ahead, with the latter announcing its bid has received the full backing of Asciano's Board of Directors.

The Asciano Board has given its "unanimous support" to the $A12 billion deal which, if approved by Asciano shareholders, would see those shareholders receive an implied value of $A9.15 per share – $A6.94 in cash and 0.0387 in Brookfield shares for each Asciano share held.

The bid represents a premium of 39 per cent of the average value of Asciano shares in June, with the deal to go forward in a 'scheme of arrangement', subject to the approval of Asciano's shareholders and compliance with the usual legal requirements.

Brookfield International employs over 9000 people across operations on four continents, with a focus on utilities, transport, energy and communications infrastructure. It is said to own 30 ports, 3300km of toll roads and 9900km of rail in Europe, North America, South America and Australia.

According to Brookfield Infrastructure's CEO, Sam Pollock, the acquisition of Asciano – owner of stevedores Patrick and rail firm Pacific National – would play a key role in the infrastructure giant's global expansion.

"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," he said in a media statement.

"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's Chairman, Malcolm Broomhead, is quoted in the Brookfield statement as giving his full support to the deal.

"We are pleased to recommend to our shareholders this compelling transaction with Brookfield Infrastructure," he said.

"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."

It's the third major deal to rock the freight and logistics world – and Australia in particular – this year. In February Japan Post announced its intention to acquire Australia's Toll Group, in a deal worth a reported $A6.5 billion. That deal went through, with Japan Post officially taking the reins from the end of May.

Then, in April, Netherlands-based TNT Express agreed to a takeover from US-based FedEx, in a deal worth $A6.2 billion.

Now Asciano, which itself was part of Toll Group up until 2007, looks likely follow its former parent in seeing its ownership head offshore.

Asciano has said its shareholders will receive an Explanatory Memorandum in early October, with a scheme of arrangement meeting to be held in mid-November before an implementation date of mid-November.

Click here to view Asciano's investor presentation on the Brookfield bid and here to read the Brookfield International media release.