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Shipping container cranes are seen at the Patrick port facility, owned by Australian rail and ports operator Asciano Ltd, in Melbourne June 9, 2009. Reuters/Mick Tsikas

Local logistics company Asciano has agreed to a A$8.9 billion takeover bid by Brookfield Infrastructure Partners, with the transaction expected to establish a “leading global rail, port and logistics business”.

The offer predominantly consists of cash – approximately 76 per cent of the total consideration – with Asciano investors offered A$6.94 cash and 0.0387 Brookfield Infrastructure units with an implied value of A$2.21 per share. This brings the final offer up to A$9.15 per Asciano share, from a previous indicative offer of A$9.05.

Shareholders can elect to receive more cash or scrip, although this is subject to applicable caps. The total implied enterprise value of Asciano under the transaction is approximately A$12 billion.

To further sweeten the deal, Asciano is expected to pay a fully franked special divided of up to A$0.90 per share before the Scheme Implementation Date. This means shareholders who can capture the full benefit of the franking credits will receive an additional A$0.39 per share, lifting the value up to A$9.54.

CEO of Asciano John Mullen says Brookfield Infrastructure’s “track record” and scale will provide the company with the scope to leverage its expertise on a global scale, as well as the “financial capacity to take advantage of the myriad of growth opportunities” in the sector.

“This transaction enables us to acquire premier transport infrastructure assets in a geography we know well and establish two leading global platforms, with solid long-term prospects,” added Sam Pollock, Chief Executive of Brookfield Infrastructure.

"Combining Asciano's Australian container terminals with our existing assets in North America and Europe provides the foundation for a global container platform.”

Brookfield Infrastructure is investing a total of approximately US$2.8 billion (approx. A$3.8 billion), and expects to own 55 per cent of Asciano when the acquision is completed.

It is also seeking an ASX listing concurrent with the transaction – expected to commence trading by December – which will provide a platform for the expansion of the infrastructure business in the region. The company at present already owns the Dalrymple Bay coal terminal in north Queensland and Western Australia’s freight rail network, Brookfeild Rail.

Asciano, which operates in Australia and New Zealand primarily through its Patrick and Pacific Nation subsidiaries, will have to pay an $88 million “break fee” if the deal does not proceed. Its shareholders will meet to vote on the Scheme in mid-November. At least 75 per cent of votes will be needed for the deal to be approved.

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