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October 22, 2021

Aurizon to take over One Rail Australia for $1.75bn

This acquisition deal is expected to complete by April next year.

Australian freight rail transport company Aurizon is reportedly set to acquire another rail freight operator, One Rail Australia (ORA), for $1.75bn (A$2.35bn).

This deal is expected to conclude by April next year.

Aurizon aims to diversify its business from coal through the agreement, as well as increase bulk capacity, according to Reuters.

The acquisition will also help Aurizon move towards greener energy by providing exposure to commodities.

Aurizon CEO Andrew Harding was quoted by the news agency as saying: “The One Rail acquisition delivers a step change for Aurizon Bulk as a new entrant in the South Australia and Northern Territory region, and supports the ongoing growth of non-coal revenue in the Aurizon portfolio.

The company will pay the deal consideration from Macquarie’s asset management unit and Dutch pension fund manager PGGM.

Aurizon then plans to either offload or spin-off ORA’s New South Wales and Queensland operations.

According to the report, Aurizon’s bulk business would generate nearly 40% of its haulage revenue after this transaction.

In fiscal year 2021, coal contributed to over a third of Aurizon’s core income.

Aurizon, which carries over 200 million tonnes of metallurgical and thermal coal annually, owns and manages coal rail networks that connect nearly 50 mines with three ports in Queensland, Australia.

In 2019, US-based Loram Maintenance of Way signed a binding agreement to buy the rail grinding services business of Aurizon.

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