The business world turns full circle with the return of Chris Corrigan to the Patrick stevedoring business. A joint deal, previewed a couple of weeks ago, will see both Qube and Canadian rail company, Brookfield, take part of the Asciano organisation, as part of a group buyout of the infrastructure enterprise.
The takeover of Asciano involves eight player in a complex deal to allay competition concerns. This will see the Patrick ports business owned jointly 50/50 by both Qube and Brookfield. Qube will hold its 50 per cent and the other half will be taken by Brookfield, along with its partners GIC, British Columbia Investment Management Corporation and Qatar Investment Authority. This deal is said to be worth $2.9 billion.
Patrick’s Bulk and automotive ports business will be acquired by the same four, led by Brookfield, as take half the ports organisation, with an option for Qube to acquire the subsidiary’s 50 per cent stake in Australian Amalgamated Terminals, at a later date.
The Pacific National rail freight business will be taken over by a group of five investors, Global Infrastructure Management, Canadian Pension Plan Investment Board, CIC Capital, GIC and British Columbia Investment Management Corporation.
“Entering into binding documentation in relation to the Transaction represents a significant step forward in the realisation of Qube’s strategy to dramatically improve the efficiency of the container import and export chain,” said Maurice James, Qube Managing Director. “I believe the agreement we have now reached represents the most common sense resolution to the ownership of Asciano and delivers the best result for all stakeholders. We look forward to working with Asciano to complete this Transaction and to welcoming Brookfield as our new joint venture partner.”
This deal has been specifically structured in a way to avoid scrutiny by the ACCC. As a result, Brookfield which already owns considerable rail assets in Western Australia is not involved in any way in the ownership of the Pacific National freight rail business. Similarly, Qube is positioned well away from the Patrick Bulk and Automotive Ports Services business, to reduce competition concerns.
The successful completion of this deal, expected by the end of June, will see Corrigan back involved with the Patrick organisation, just over ten years since he rode off on his well earned cycling holiday in Italy, after the long and bitter fight for control of his ports business with Toll’s Paul Little. In order to address ACCC concerns at the time, Toll separated out into Asciano and Toll soon afterwards.