M&A radar: All of a sudden, a deal spike – Japan leads
Run baby run
Infrastructure investors Brookfield Infrastructure and Singapore’s state-owned GIC are set to buy North America rail operator Genesee & Wyoming (G&W) in a huge $8.4bn deal.
The three parties announced today that the price had been agreed, but stressed that it was unlikely to complete until the end of the year or in early 2020.
The deal requires approval by G&W’s shareholders, with some 66% of its stock publicly traded on the New York Stock Exchange.
G&W owns a portfolio of 120 short-line railroads, predominantly in North America, but with operations in Europe and Australia, including the UK’s largest intermodal operator, Freightliner, and runs services over more than 26,000km of track globally.
G&W chairman and chief executive Jack Hellmann said: “For our customers, employees, and Class I 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 we serve in North America and around the world.
“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,” he added.
Sam Pollock, CEO of Brookfield Infrastructure, added: “This is a rare opportunity to acquire a large-scale transport infrastructure business in North America. G&W will be a significant addition to our global rail platform and will expand our presence in this sector to four continents [and] provides critical transport services to more than 3,000 customers, and its cash flows have proven to be highly resilient over many years.”
Ang Eng Seng, chief investment officer for infrastructure at GIC, said, “As a long-term investor, GIC is confident G&W will continue to generate steady profitability, given its diversified operations and customer base.”