The Aurizon Holdings Ltd (ASX: AZJ) share price dipped slightly lower today. That's despite the company finalising a deal to sell its Queensland rail terminal to Pacific National for $205 million.
The deal, which was announced in 2017, was initially blocked by the Australian Competition and Consumer Commission (ACCC), following a lengthy legal battle.
At close of trade, shares in the railway operator were trading for $3.88 – down 0.77%. By contrast, the S&P/ASX 200 Index (ASX: XJO) finished the day 0.49% higher.
Let's take a closer look at the deal and its history.
Aurizon's $205 million deal
The Aurizon share price fell today despite the cash injection. In a statement to the ASX, Aurizon announced the deal to sell the Acacia Ridge Terminal in Queensland was finalised. Before today's announcement, Aurizon had already received a $35 million, non-refundable payment. The remaining $170 million was received today.
The company expects a tax bill of $40 million from the sale. When the Foreign Investment Review Board cleared the sale in February 2021, the contract became unconditional.
The sale marks the final stage of Aurizon's exit from its "loss-making Intermodal business," according to the company. There were 2 other stages:
- Closure of the Interstate intermodal business (outside Queensland) completed in December 2017
- Sale of the Queensland Intermodal business to Linfox which was completed on 31 January 2019 ($7.3 million received by Aurizon).
Aurizon vs the ACCC
In 2018, the ACCC announced its intentions to block the terminal's sale. The government body cited its belief the sale would lessen competition and "would deter a new entrant from providing interstate rail linehaul services in competition with Pacific National."
In 2019, the Federal Court dismissed the ACCC's objections to the deal. The agency subsequently appealed the decision to the High Court. In 2020, the High Court refused to hear the case and thus, the Federal Court's decision stood. Aurizon and Pacific National completed the deal soon after.
Aurizon share price snapshot
Over the last 12 months, the Aurizon share price has fallen 8.27%. Before the coronavirus crash of March last year, Aurizon shares were trading as high $5.65 in 2020.
Aurizon has a market capitalisation of $7.1 billion
