Brookfield group lands $11.6B deal for Australia’s Asciano

So What: On 1 July Asciano provided an announcement to the market confirming that it had received a proposal from Brookfield Infrastructure Group to acquire all of its shares at an implied value of $9.05 per share in cash and script – the script portion being units in Brookfield’s listed infrastructure fund, Brookfield Infrastructure Partners L.P.

“Combining Asciano’s Australian container terminals with our existing assets in North America and Europe provides the foundation for a global container platform”. Japan Post Holdings Co. agreed to purchase logistics operator Toll Holdings Ltd.in February for A$6.5-billion, while a consortium including China Merchants Group Ltd. acquired Newcastle Port last year for A$1.75-billion. It owns the Westnet rail business in Western Australia state and controls the Dalrymple Bay Coal Terminal in Queensland.

Asciano AANOF, -1.37% shareholders will receive A$6.94 a share in cash and 0.0387 limited partnership units of Brookfield, for a total implied value of A$9.15 a share.

A sale of Asciano to Brookfield Infrastructure will change the dynamics of the Australian logistics industry, and will create a stronger competitor to rail group Aurizon.

Asciano operates container terminals in several Australian port cities along with a national rail freight network consisting of more than 14,000 railcars. They fell as much as 7 percent earlier.

But Asciano’s shares closed on Friday at $8.11, well below the indicative bid, indicating investors remain uncertain about the structure of the deal.

The Bermuda-based affiliate of Brookfield Asset Management (TSX:BAM.A) would own 55 per cent of Asciano with an investment of US$2.8 billion, or about C$3.67 billion at current exchange rates.

Asciano is expected to post a net profit of A$392 million for the year to June 30 on Tuesday – the company’s highest since being spun off by Toll Holdings in 2007- according to the average forecast of 16 analysts polled by Thomson Reuters StarMine.