EQT to buy GB Railfreight from Eurotunnel

The private equity firm has submitted an irrevocable offer for the UK’s third-largest rail freight operator in a bid to merge it with Hector Rail.

Swedish fund manager EQT is set to acquire GB Railfreight, a UK rail freight operator, through its second infrastructure vehicle.

In a statement, EQT said it has launched an “irrevocable offer” to buy the company, which is currently owned by Groupe Eurotunnel. The transaction is now subject to approval by the latter’s staff representative bodies, after which EQT and Eurotunnel said they would agree to a binding deal.

The investment is being carried out by EQT Infrastructure II, which closed on €1.92 billion in January 2013. GB Railfreight is the fund’s second such deal after it bought Hector Rail in September 2014. EQT said both acquisitions are part of a “strategy to create a leading independent pan-European rail freight operator”.

Hector Rail, which will incorporate GB Railfreight into its organisational structure, operates in Sweden, Norway, Denmark and Germany. GB Railfreight is only operative in the UK and transports about 15 percent of the UK’s rail freight.

“EQT has followed the European rail sector since the inception of its infrastructure funds and continues to see supportive macroeconomic trends across the sector,” said Anna Sundell, director at EQT and investment advisor to EQT Infrastructure.

The deal is expected to close by the end of the year.