Brookfield Infrastructure Partners LP is poised to expand its rail investment through a deal for Australia's only operator of both rail freight and ports.
The Hamilton, Bermuda-headquartered global infrastructure investor, managed by Toronto-based Brookfield Asset Management Inc., said it has entered into exclusive talks to acquire Asciano Ltd.
Brookfield Infrastructure and other institutional partners offered $9.05 (Australian) a share, valuing the deal at $8.8-billion, or $8.5-billion (Canadian).
Brookfield has been directly involved in Australia's rail industry for about 15 years. It now manages and runs a 5,500-km freight network in the southern half of Western Australia. This rail network provides a passage for commodities such as grains to government-owned ports, and more than $1.2-billion has been invested in the network in the last five years.
In addition to rail transport services, Asciano operates container terminals and port facilities to move raw resources as well as retail products by land and sea. The company also does business in New Zealand. By the end of Asciano's fiscal 2016 year, about $2-billion will have been spent upgrading infrastructure with locomotives, new cranes and improved automation in a five-year period.
The sale talks are in early stages and no deal is firm.