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Rail News: Railroading Supplier Spotlight
GE to sell tank-car leasing, rail-car repair facilities to Marmon; remaining rail-car leasing to Wells Fargo
GE announced yesterday that it has reached separate agreements to sell its tank car fleet assets and rail-car repair facilities to Marmon Holdings Inc., and its remaining rail-car leasing business, General Electric Railcar Services LLC, to Wells Fargo & Co.
Terms of the transactions were not disclosed.
The tank car assets sale closed yesterday. The sale of the rail-car repair facilities is expected to close in the fourth quarter. Sale of the remaining rail-car leasing business is subject to customary regulatory and other approvals, and is expected to close by the end of first-quarter 2016, company officials said in a press release.
When completed, the rail transactions — which represent about $4 billion of ending net investment — will contribute $1.3 billion of capital to the overall target of $35 billion of dividends expected to GE under the plan, subject to regulatory approval, they said.
"These transactions are another example of the value generated by GE Capital's strong businesses and exceptional teams as we continue to demonstrate speed and execute on our strategy to sell most of the assets of GE Capital," said Keith Sherin, GE Capital chairman and chief executive officer. "We expect to be substantially done with our exit strategy by the end of 2016."
GE Railcar Services leases a broad range of rail cars, as well as locomotives to shippers and railroads across North America.
"We're pleased to sell our railcar business and, separately, our tank car fleet and railcar repair shops, to buyers that are long-term players in the industry committed to expanding the businesses," said Sherin.
The announcement comes as GE continues to embark on a strategy that focuses on its industrial businesses, while selling most GE Capital assets, company officials said in a press release.
The company will retain the financing "verticals" that relate to its industrial businesses.
Contact Progressive Railroading editorial staff.