Brookfield, GIC to buy freight rail operator Genesee & Wyoming for $6.4 bn

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Brookfield, GIC to buy freight rail operator Genesee & Wyoming for $6.4 bn

On Monday, the 1st of July 2019, Singaporean state-controlled wealth fund GIC and Canada’s Brookfield Asset Management had reached an accord to purchase Genesee & Wyoming, US freight railroad owner, at an all-cash buyout deal of $6.4 billion, while GIC and Brookfield’s offer of $112 per share stood for a premium of 12 percent to Genesee’s closing price on Friday (June 28th).

Nonetheless, followed by the reveal of acquisition, Genesee’s shares were up by 8.85 percent to $108.85 on Monday’s (July 1st) market closure. Including debt, the buyout deal for the American short-line railroad company, founded back in 1899, valued at $8.4 billion, Genesee said at a statement on Monday (July 1st).

In fact, according to Genesee & Wyoming’s 2018’s annual report, the company had been growing at a rate of 16.8 percent per annum in the stock market since its appearance in the public market back in 1996, rising its value to $2.3 billion in 2018 from $77.8 million about two-decade earlier.

According to the people with direct knowledge regarding the buyout offer, the deal is expected to close later this year or earlier in 2020, while it would be latest high-end leveraged buyout by Brookfield, which last year had purchased Johnson-controlled International Plc.’s power solution business for $13 billion.