Brookfield’s proposed takeover of ASX-listed logistics and infrastructure firm Asciano will hurt the competitiveness of WA’s grain industry, according to the peak farming body in the state.
The Western Australia Farmers Federation has reportedly submitted to the Australian Competition and Consumer Commission that the takeover should be blocked to prevent a monopoly market being created on Australia’s west coast.
“WA Farmers urges the ACCC to deny the proposed acquisition, as the monopolistic nature of the infrastructure involved will lead to anti-competitive behaviour in the already turbulent rail freight network in WA,” the group was quoted by the AFR.
The Bermuda-based Brookfield Infrastructure Partners already owns rail infrastructure operator Brookfield Rail in Western Australia.
“Brookfield could position their vertically integrated assets to squeeze out competition,” the federation reportedly argued.
A spokeswoman from grains co-operative CBH, also quoted in the AFR, said that group had also submitted its rebuttal to the ACCC.
“CBH has concerns about the deal at this point in time and is adamant that Australia must have an appropriate regulatory framework that ensures better price setting and performance monitoring before approval is given for any key infrastructure acquisitions such as Brookfield’s purchase of Asciano.”
Asciano announced late in August the terms agreed between the two parties, which are based on a per-share valuation of $9.15 – 10c more than the initial offer announced on July 1.
Under the terms of the deal, Asciano will be acquired by a consortium led by Brookfield Infrastructure Partners, for an “implied value” of $9.15 a share, valuing the Australian logistics and infrastructure business at approximately $12 billion.
Asciano shareholders will receive $6.94 in cash, and 0.0387 Brookfield Infrastructure shares, for every Asciano share they own. Each 0.0387 Brookfield Infrastructure share has an implied value of $2.21.
Brookfield Infrastructure will seek an ASX listing concurrent with the transaction.
The ACCC announced it would review the transaction in August, saying the review would concern the potential competition and market implications of an acquisition.
Asciano is the parent company of rail operator Pacific National and ports and terminals operator Patrick.
I must admit that I find the whole matter a little amusing considering the NSW state government and federal government sold off their respective stakes in the above rail operations space when they gave away FreightCorp and National Rail to apparently promote competition and consequently improve the treasury’s bottom line.
Who knew that one day by placing these assets into the hands of private ownership that these same assets would /could fall into the hands of overseas interests.
Let’s see how the respective governments respond to this surprising turn of events.