Genesee & Wyoming buys G’Rail from Glencore

Genesee & Wyoming has shaken off competition from Aurizon and Pacific National to buy G’Rail from Glencore, in a deal worth $1.14 billion.

The deal, reported on The Australian’sBusinessNow blog, will see Genesee & Wyoming own 51 per cent and MIRA own 49 per cent

The US-based business, which operates via a subsidiary in Australia, had been working in partnership with Macquarie’s infrastructure arm on the transaction and was being advised by Bank of America Merrill Lynch, while Royal Bank of Canada was selling the asset for Glencore.

The sale of the coal haulage operation in the New South Wales Hunter Valley is subject to Foreign Investment Review Board Approval.

G’Rail was established in 2010 and has steadily grown to become the third-largest coal haulage business in the country, said Peter Freyberg, head of Glencore’s Global Coal Assets.

“It has played a very important role in reducing costs and improving the overall efficiency of Australia’s largest coal chain in the Hunter Valley.”

Upon completion, GWA will service the majority of Glencore’s coal haulage requirements in the Hunter Valley via a 20-year contract for the haulage of our export coal to the Port of Newcastle.

G’Rail currently hauls approximately 40 million tonnes per year of Glencore’s Hunter Valley coal production to the Port of Newcastle.

The sale of the GRail business is part of Glencore’s debt reduction program.