Macquarie Asset Management and Dutch pension fund asset manager PGGM have sold One Rail Australia to rail freight operator Aurizon for A$2.35bn (£1.5bn).

One Rail owns bulk rail haulage and general freight assets in South Australia and the Northern Territory; the 2,200 km Tarcoola-to-Darwin railway line; and a rail haulage business in New South Wales and Queensland.

Macquarie and PGGM had owned One Rail, formerly known as Genesee & Wyoming Australia, since 2016.

Frank Kwok, head of Asia-Pacific real assets and Macquarie Asset Management, said that under its ownership, One Rail had diversified its markets and grown the business.

Over the past five years, Management and PGGM had invested more than $A250m in capital expenditure to support the management team in growing the customer base and workforce, and increasing diversification of the commodities it carried.

Andrew Harding, managing director and CEO of Aurizon, said the One Rail acquisition is fully aligned with Aurizon’s strategy to double the company’s bulk freight business into new markets and new geographies in Australia.

This would expand Aurizon’s bulk business into numerous existing commodities and growth opportunities in base metals, agriculture, iron ore and new-economy metals such as manganese and copper,” said Harding.

To meet competition concerns from the Australian Competition & Consumer Commission arising from the transaction, Aurizon will divest One Rail’s business in NSW and Queensland, which operates as East Coast Rail (ECR), through demerger or a trade sale.

Prior to that, ECR would be operated independently of the Aurizon Group with a separate CEO and management team.

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