GIC, Brookfield to buy US freight railroad company for US$6.4 billion in cash

green and white leafed plantsSINGAPORE: Singapore’s sovereign wealth fund GIC and Canada’s Brookfield Asset Management on Monday (Jul 1) agreed to buy US freight railroad owner Genesee & Wyoming for about US$6.4 billion in cash.

Brookfield and GIC’s offer of US$112 per share represents a premium of 12 per cent to Genesee’s closing price on Friday. Genesee shares were up 9 per cent.



Including debt, the deal is valued at about US$8.4 billion, the companies said in a statement.

Genesee & Wyoming’s revenue has increased at a compound annual growth rate of 16.8 per cent since it floated in the stock market in 1996, rising to US$2.3 billion in 2018 from US$77.8 million, according to Genesee & Wyoming’s latest annual report.

The company owns a portfolio of 120 short-line railroads, predominantly in North America, with operations in Europe and Australia.

The deal, which is expected to close by year end or early 2020, would be the latest big leveraged buyout by Brookfield, which agreed last year to buy Johnson Controls International’s power solutions business for about US$13 billion.



Citigroup Global Markets served as the financial adviser to Brookfield and GIC, while BofA Merrill Lynch and Morgan Stanley & Co advised Genesee.

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