Aurizon has signed an agreement with Macquarie Asset Management to acquire One Rail Australia (ORA) for $2.35 billion.
Aurizon will retain the ORA bulk and general freight assets, including the Tarcoola-to-Darwin rail infrastructure, South Australian regional infrastructure, five rail yards, 68 active locomotives, over 1000 active wagons and approximately 400 employees.
However, the East Coast Rail (ECR) business will be divested through a demerger or a trade sale, whichever creates greater value for Aurizon shareholders.
Aurizon managing director and chief executive officer Andrew Harding said the deal would transform the company’s Australian footprint.
“The One Rail acquisition is highly strategic and transformative for Aurizon. It is fully aligned with Aurizon’s strategy to grow our Bulk freight business into new markets and new geographies in Australia,” Harding said.
“At our Investor Strategy Day in June, we detailed our aspiration to double our earnings in the Bulk business over the coming decade.
“The One Rail acquisition delivers a step change for Aurizon Bulk as a new entrant in the SA and NT region, and supports the ongoing growth of non-coal revenue in the Aurizon portfolio.”
Until ECR is divested, it will be operated independently by the Aurizon Group with a separate chief executive officer and management team.
“Upon completion of the transaction, with the integration of One Rail bulk and divestment of ECR, the Bulk share of Aurizon’s haulage revenue will represent around 40 per cent,” Harding said.
“The ORA bulk infrastructure and operations in SA and NT provide customers with a safe, efficient and effective pathway to market for numerous existing commodities and growth opportunities in base metals, agriculture, iron ore and for new-economy metals such as manganese and copper.”
Aurizon aims to complete the ORA acquisition by April 2022, and the divestment of ECR in before the end of 2022.