New name for Genesee & Wyoming Australia

Having completed the sale of Genesee & Wyoming Australia, the freight rail operator is now known as One Rail Australia.

The name change was published by the Australian Business Register on February 18, and follows a change of ownership for the operator.

The company has operated freight rail services in South Australia, the Northern Territory, and the Hunter Valley, and Genesee & Wyoming Australia also previously operated services in Western Australia in a joint venture with Wesfarmers.

Until 2019, Genesee & Wyoming Australia’s US parent company owned 51.1 per cent of the Australian arm of the business. The other 48.9 per cent is owned by a consortium of funds and clients, managed by Macquarie Infrastructure and Real Assets.

The announcement in December finalised the sale of the US parent company to Canadian investment fund Brookfield Infrastructure and Singaporean investment firm GIC.

The transaction’s total value for the entire Genesee & Wyoming business is approximately $8.4 billion.

The Australian portion of the sale had to be completed separately due to Brookfield already owning rail assets in Australia. Macquarie Infrastructure and Real Assets and Dutch pension manager PGGM will own the remainder of the company previously owned by Genesee & Wyoming’s US parent company.

According to reports, One Rail Australia will retain the Genesee & Wyoming livery however with a new logo.

In the US, Genesee & Wyoming is known for owning a number of short line railroads. The company also has operations in the UK and Europe.

Brookfield, GIC to purchase Genesee & Wyoming in $12bn deal

Brookfield Asset Management and GIC are set to purchase freight rail major Genesee & Wyoming (G&W) in a deal worth around $US8.4 billion ($12 billion), including debts.

Canada-based Brookfield and Singapore-based GIC will offer $US112 for each G&W share, representing a 12 per cent premium on the company’s closing price on June 28, and a 39.5 per cent premium on the company’s $US80.28 closing price on March 8, the last day before media speculation regarding the transaction came about.

The transaction is expected to close by the end of 2019 or in early 2020, subject to certain conditions.

Brookfield chief executive officer Sam Pollock said that the deal represented 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,” Pollock said. “G&W provides critical transportation services to more than 3,000 customers, and its cash flows have proven to be highly resilient over many years.”

G&W, which operates the 2240-kilometre Tarcoola-to-Darwin freight rail line through subsidiary G&W Australia, will become a privately-owned company as part of the deal.

G&W Australia is 51.1 per cent owned by G&W and 48.9 per cent owned by a consortium led by Macquarie. An Australian Financial Review article published yesterday speculated that Macquarie may be planning to purchase G&W’s share of the company in a $2 billion deal, but this has yet to be officially confirmed.

“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 that we serve in North America and around the world,” said G&W chairman and chief executive officer Jack Hellman.