Brookfield/GIC Undertaking

On 12 November 2019, the ACCC accepted an undertaking (the Undertaking) given by Brookfield Infrastructure Group (Australia) Pty Ltd (Brookfield Australia) and DJP XX LLC (Brookfield) (together, the Brookfield parties) pursuant to s 87B of the Competition and Consumer Act 2010 (Cth) in connection with the Brookfield Parties’ proposal to acquire 100 per cent of the share capital in Genesee & Wyoming Inc. (GWI) (the Proposed Acquisition).

In Australia, GWI operates through Genesee & Wyoming Australia Holdings LP (GWA). GWA provides above and below rail services in South Australia and the Northern Territory and operates rail haulage in the NSW Hunter Valley region. It is structured as a limited partnership and 51.1 per cent of its share capital is held by GWI with the remaining 48.9 per cent collectively held by funds advised by Macquarie Infrastructure and Real Assets (MIRA) and its co-investor PGGM Infrastructure Fund (PGGM). 

The Brookfield Parties made a commercial decision to offer the undertaking to divest the 51.1 per cent share in GWA held by GWI. The Undertaking was offered to remove any overlap in the parties’ activities likely to arise from the Brookfield Parties’ acquisition of GWI.

The Undertaking aims to achieve this objective by placing obligations on the Brookfield Parties to:

1. ensure that the Divestiture Business is divested to an Approved Purchaser;
2. create or strengthen a viable, effective stand-alone, independent and long term competitor in the market for rail services in the Northern Territory,  South Australia and New South Wales;
3. ensure the Approved Purchaser has all the necessary associated assets and rights to compete effectively in the above markets;
4. maintain the economic viability, marketability, competitiveness and goodwill of the Divestiture Business prior to divestiture; and
5. provide for the effective oversight of Brookfield’s compliance with this Undertaking.

MIRA and PGGM have been approved as upfront purchasers of the 51.1 per cent stake in GWA under the Undertaking.