Logistics, Ports & Terminals, Mining and Heavy Industries

ACCC opens review of Brookfield’s Asciano takeover

Pacific National at Chullora. Photo: Cameron Boggs

The proposed takeover of transport and logistics business Asciano by Brookfield has taken another step towards legitimacy, with the Australian Competition & Consumer Commission opening an informal review of the acquisition.

The ACCC is inviting comments from interested parties on the matter.

Its review will concern the potential competition and market implications of an acquisition of Asciano – parent company of rail operator Pacific National and ports and terminals operator Patrick – by a consortium assembled by Brookfield Asset Management.

Comments are welcomed by the ACCC until September 4.

The major player in the takeover consortium is Brookfield Infrastructure Partners. Brookfield Infrastructure Partners is managed by Brookfield Asset Management, with the parent company owning a 41% share in the business since it spun off in 2008.

Brookfield Infrastructure Partners owns Brookfield Rail in Western Australia. It also owns a majority share in the Dalrymple Bay Coal Terminal in Hay Point, Queensland, as well as Tasmania’s gas network.

Asciano advised the market on July 1 that Brookfield had formally bid $9.05 a share to acquire 100% of the ASX-listed business, giving it a valuation of $8.83 billion.

Just prior to the offer, Asciano sat at around $6.47 a share – giving it a market capitalisation at that time of $6.31 billion.

Since the offer was announced, shares have surged to close on Monday, August 10 at $8.10 – giving the company a market capitalisation of $7.90 billion, a 40-day rise of nearly $1.6 billion.

Upon announcing the offer on July 1, Asciano’s board concluded it was “in the interests of its shareholders to engage further” with Brookfield.

Brookfield provided an update in its second quarter results announcement, on August 5.

“In late June, we were required for regulatory reasons to prematurely disclose to the market that we were engaged in exclusive discussions to acquire Asciano Limited, a large rail and port logistics company operating across Australia,” the Toronto- and New York-listed firm explained.

“It is a high quality company with an established market position in both the rail and port sectors in the country.

“At this stage, we continue to have work ahead of us in determining whether a transaction of this nature can be progressed.”

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