July 1, 2019

Brookfield Asset to acquire G&W

Toronto-based Brookfield Asset Management has agreed to acquire North American freight railroad owner and operator Genesee & Wyoming (G&W) for $8.4 billion, including debt.

Based in Connecticut, G&W owns or leases 120 freight railroads in the US, Canada, Britain and continental Europe.

Pursuant to the agreement, each issued and outstanding share of G&W will be converted into the right to receive $112 per share in cash.

G&W’s decision to sell comes after a string of acquisitions of short-line railroads made investing in the maintenance of an expanding network more expensive, amid weakness in some core North American markets for the transport of coal and agricultural products.

The deal is expected to close by year-end or early 2020, subject to the usual customary closing conditions.

Brookfield Infrastructure’s investment will be about $500 million of equity.

The remainder of the business will be owned by Brookfield Infrastructure’s institutional partners and Singaporean sovereign wealth fund GIC.

Brookfield Infrastructure’s investment will be funded from existing liquidity.

Citigroup Global Markets is serving as financial advisor to the acquiring consortium, with White & Case serving as lead legal advisor to the consortium, along with McCarthy Tétrault, Gilbert + Tobin and Steptoe & Johnson which are also serving as consortium legal advisors.

Torys is serving as legal advisor to Brookfield Infrastructure and Sidley Austin is serving as legal advisor to GIC.

Financing for the consortium will be led by a bank syndicate that includes Credit Suisse, Wells Fargo Securities, Citigroup Global Markets and RBC Capital Markets.

BofA Merrill Lynch and Morgan Stanley served as financial advisors to G&W.

Simpson Thacher & Bartlett, as well as Addleshaw Goodard, Allens Clark Hill, Macfarlanes and Stikeman Elliott served as legal advisors to G&W.

In addition, Wachtell Lipton Rosen & Katz served as counsel to the G&W board.