Hong Kong-based China Merchants Port Holdings Company (CMPort) has signed an agreement with China Merchants Union (CMU) and its wholly owned subsidiary Gold Newcastle Property to acquire 50% interest in Australia’s Port of Newcastle for A$607.5m ($478m).

The total value of the transaction also includes shareholder loans of approximately A$162.5m ($128m).

An independent third party known as the TIF Investment Trust is slated to hold the remaining 50% interest in the port following the deal’s completion.

"The company aims to continue to fulfil its ‘Port and Park’ development under a ‘Port-Park-City’ (PPC) model via the proposed deal."

Announcing the deal, CMPort said in a statement: “The acquisition of Port of Newcastle in Australia is the first step for CMPort to invest in Oceania, which can complement the current trading network covered under the company’s port portfolio with further potential synergies.”

The company aims to continue to fulfil its ‘Port and Park’ development under a ‘Port-Park-City’ (PPC) model via the proposed deal.

The PCC strategy aims to operate its core port businesses together with park development and infrastructure support.

CMPort also intends to generate positive long-term financial return as a result of the deal.

The Port of Newcastle is noted to be one of the major coal export ports worldwide. It is equipped with four port zones, including 21 berths with a total design capacity of 211 million tonnes.

The port primarily exports coal to Japan, South Korea and Taiwan.

In a separate development, CMPort has agreed to sell roughly 25% of the total issued share capital in A shares and 8.58% of the total issued share capital in B shares of Shenzhen Chiwan Wharf Holdings to China Merchants Group (CMG) for approximately HK$5.01bn ($641m) and HK$738.44m ($94m) respectively.