Australia's Asciano bows to $6.8 billion break-up bid

Tue Mar 15, 2016 1:08am EDT
 
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By Byron Kaye

SYDNEY (Reuters) - Australia's Asciano Ltd AIO.AX on Tuesday agreed to a A$9.1 billion ($6.8 billion) buyout by two global consortia after a seven-month bidding war for the port and rail giant, although doubts persist over anti-trust and foreign ownership issues.

In its third takeover endorsement in nine months, Australia's largest ports and rail operator said it now supported a joint bid from local rival Qube Holdings Ltd QUB.AX, Canada's Brookfield Asset Management Inc BAMa.TO and a host of backers from China to Qatar.

The deal would cement Sydney-based Qube's position as Australia's biggest stand-alone ports company. Beijing's sovereign wealth fund, China Investment Corp (CIC) [CIC.UL], would get Asciano's railways business along with the Canadian Pension Plan Investment Board and U.S. investor Global Infrastructure Partners.

For China, the transaction fits with Beijing's efforts to amass freight transport lines from Asia to Europe to secure global supply chains as its economy sputters at its slowest growth rate in 25 years.

Even so, the deal still needs clearance from regulators in Australia, New Zealand and Europe, including Australia's competition watchdog and its Foreign Investment Review Board, which will check that Chinese ownership of rail assets is in the national interest.

COMMON SENSE

Qube announced an A$800 million equity raising to pay for the deal, with Managing Director Maurice James saying it was the "most commonsense resolution" after Qube and Brookfield had butted heads with rival bids for months.   Continued...

 
Shipping container cranes are seen at the Patrick port facility in Melbourne in this June 9, 2009 file photo. REUTERS/Mick Tsikas/Files