GIC, Brookfield Infrastructure to buy railroad owner Genesee & Wyoming Inc

SOVEREIGN wealth fund GIC and Brookfield Infrastructure will acquire US railroad owner Genesee & Wyoming Inc (G&W) in a deal valued at about US$8.4 billion, including debt.

G&W shareholders will receive U$112 in cash per share of common stock, which represents a 39.5 per cent premium to its share price of US$80.28 on March 8, the day prior to initial media speculation of a potential transaction.

Brookfield Infrastructure's investment will be about US$500 million of equity, while the remainder of the business will be owned by Brookfield Infrastructure's institutional partners and GIC.

Under the new ownership, G&W - which will become a privately-held company - "will continue to focus on safety and service, while pursuing the company's strategic goals", Brookfield, GIC and G&W said in a joint release on Monday.

G&W owns a portfolio of 120 short line railroads, largely in North America, with operations in Europe and Australia.

The deal is expected to close by year-end or early 2020, subject to conditions, including approval by G&W stockholders as well as the necessary regulatory approvals and certain competition and antitrust approvals.

Separately, GIC also announced on Monday that it has entered into an 80:20 joint venture with data centre company Equinix to acquire and develop six hyperscale data centres in Europe for over US$1 billion. That transaction is expected to close in the third quarter. The JV will acquire two operational data centres in London and Paris, which deliver a combined 31 megawatts of power to customers. In addition, there are plans to further develop a data centre each in London and Amsterdam, and two sites in Frankfurt.

Once fully developed, these six facilities will provide approximately 155 megawatts of power capacity. Equinix will develop, operate and manage the data centres.