Macquarie Infrastructure and Real Assets has agreed to acquire 49 percent of Genesee & Wyoming's Australian subsidiary, forming a joint venture that will then buy Glencore Rail for A$1.14 billion ($870 million; €800 million).
GWA had until now been the operator of the GRail fleet, but Swiss-based commodities giant Glencore remained the owner of the rolling stock.
In a statement, G&W said the partnership it is creating with Macquarie will have an enterprise value of A$2 billion, comprising A$1.3 billion coming from the two parties – in the form of cash, shareholder loans and contributed capital – and a five-year A$690 million senior secured bank loan.
The latter's proceeds will be used to fund the acquisition of GRail, repay an existing A$250 million loan held by GWA and pay A$32 million in transaction costs.
GRail is Australia's third-largest coal haulage business. The deal covers a 20-year exclusive contract to transport all coal produced in the Hunter Valley, with minimum guaranteed volumes over the first 18 years, to the Port of Newcastle, as well as 30 locomotives and 894 wagons.
Through the transaction, G&W is doubling the size of its Australian unit, according to Jack Hellmann, president and chief executive of G&W. The group operates nearly 5,000km of tracks in South Australia and the Northern Territory through GWA, with presence in Northern America and Europe.
The transaction, which remains subject to approval by Australia's Foreign Investment Review Board, is expected to close on 1 December.