UPDATE 5-Canada's Brookfield buying Australia freight firm Asciano for $6.6 bln

Tue Aug 18, 2015 12:41am EDT
 
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* Brookfield has upbeat view of Australian coal

* Cash-and-stock offer valued at A$9.15 per share

* Offer at 13 pct premium to Asciano's Friday price (Recasts throughout; adds analyst and company quotes)

By Byron Kaye

SYDNEY, Aug 18 (Reuters) - Canada's Brookfield Asset Management is buying Australian port and rail freight firm Asciano for $6.6 billion to form a global logistics player, scooping up an asset that has been made cheaper by a slump in coal prices.

The deal, the largest purchase of an Australian firm by an overseas entity since 2011 and the biggest acquisition by a Canadian firm in that country, underscores the huge international appetite for Australian infrastructure.

It also casts a vote of confidence in the long-term future of the Australian coal industry, which is expected to defy global pressure on high polluting energy sources and grow exports in the years ahead. Coal exports are a key generator of earnings for haulage companies like Asciano.

After slumping to 8-year lows, the coal price CO-FOBNWC-AU will probably stop falling soon and a lower Australian dollar means coal producers "are probably in better condition today than they were a year ago", Brookfield's infrastructure chief executive, Sam Pollock, told journalists in Sydney.

Record low interest rates and a shrinking currency have added to the M&A appeal of the Australian logistics sector which is already struggling with lower valuations because of a downturn in commodity prices.   Continued...