Aurizon Holdings to acquire One Rail Australia for $1.8bn
05:24, 22 October 2021
Railway operator Aurizon Holdings plans to acquire One Rail Australia (ORA) for AUD2.35bn ($1.8bn) which will allow it to tap into new geographies and increase its non-coal bulk freight business.
Following the acquisition, the country’s largest rail freight company will gain access to South Australia and Northern Territory, including the 2,200km railway line stretching from Tarcoola to Darwin.
“Aurizon will retain and integrate the ORA bulk and general freight assets into the Aurizon business. These include the Tarcoola-to-Darwin rail infrastructure, South Australian regional infrastructure, five rail yards, 68 active locomotives, over 1000 active wagons and approximately 400 employees,” the company said in an exchange filing.
“Transformative” acquisition
“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,” said managing director and CEO Andrew Harding.
By entering the new regions, Aurizon can increase its non-coal freight business, including “growth opportunities in base metals, agriculture, iron ore and for new economy metals such as manganese and copper,” added Harding.
To divest ORA’s East Coast Rail
The acquisition would also see ORA’s East Coast Rail (ECR) in New South Wales and Queensland transferred to Aurizon, regions where the latter has dominant position.
To ensure clearance from Australia’s antitrust body, Aurizon will have ECR to be operated independently and will be divested post-acquisition. The railway operator expects the transaction to be concluded between January and April 2022, while ECR divestment likely to be completed before the end of next year.
Following the deal announcement, shares in Aurizon fell 6% at AUD3.66 in late afternoon on the Australian bourse.
Read more: Rail operator Aurizon reports stagnant revenues and earnings for 2021
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