Canada’s Brookfield buying Australia freight firm Asciano for $ 6.6 b

Canada’s Brookfield Asset Management is buying Australian port and rail freight firm Asciano for $ 6.6 billion to form a global logistics player, scooping up an asset that has been made cheaper by a slump in coal prices.

The deal, the largest purchase of an Australian firm by an overseas entity since 2011 and the biggest acquisition by a Canadian firm in that country, underscores the huge international appetite for Australian infrastructure.

It also casts a vote of confidence in the long-term future of the Australian coal industry, which is expected to defy global pressure on high polluting energy sources and grow exports in the years ahead. Coal exports are a key generator of earnings for haulage companies like Asciano.

After slumping to eight-year lows, the coal price will probably stop falling soon and a lower Australian dollar means coal producers “are probably in better condition today than they were a year ago,” Brookfield’s Infrastructure Chief Executive, Sam Pollock, told journalists in Sydney.

Record low interest rates and a shrinking currency have added to the M&A appeal of the Australian logistics sector which is already struggling with lower valuations because of a downturn in commodity prices.

Asciano’s former parent company, Toll Holdings, agreed to a A$ 6.5 billion takeover by Japan Post Holdings earlier this year, while larger rail freight provider Aurizon Holdings has been seen as a potential takeover target.