Australia's Asciano resolves dispute gnawing at $6.8 billion buyout
SYDNEY (Reuters) - Australian freight giant Asciano Ltd AIO.AX on Monday said it has resolved a legal dispute with a trucking subsidiary that had threatened to delay a A$9.1 billion ($6.8 billion) buyout led by Canada's Brookfield Asset Management Inc (BAMa.TO: Quote).
Asciano said it agreed to give its half stake in Sydney trucking business Australian Container Freight Services Pty Ltd (ACFS) to the family which owned the other half. It did not say whether the transaction involved payment.
Asciano added in a statement that it would also hand over some port leases to the joint venture.
The settlement will be a welcome respite for Asciano and the global consortium of investors from Canada, Australia, China and the Middle East which has been trying to buy it for more than a year.
After a protracted bid war and some regulatory setbacks delayed the takeover, the co-owners of ACFS last month asked the Supreme Court of New South Wales to make Asciano confirm its rights under the buyout plan.
The specifics of ACFS's concerns were not made clear, but Asciano had said it would defend the action, raising the prospect of yet another complication affecting the deal.
Asciano added on Monday that by handing its stake in the trucking business to its joint venture partners, it would reduce concerns by the competition regulator that the new company might control too many elements of the supply chain.
"The degree of vertical integration following the transaction would be comparable to the current extent of vertical integration and, accordingly, competition concerns would be less likely to arise," Asciano said in the statement.
The Australian Competition and Consumer Commission, which has raised concerns that the deal might give Asciano's new owners too much market power in some segments of the country's logistics industry, is expected to give its ruling on July 21. Continued...