Wells Fargo will sell its rail leasing equipment business to a new joint venture of GATX Corp. and Brookfield Infrastructure, the financial company announced Thursday.
The joint venture will purchase approximately 105,000 railcars for $4.4 billion; Brookfield (NYSE: BIP) will separately acquire the Wells Fargo (NYSE: WFC) rail finance portfolio of approximately 23,000 cars and 400 locomotives, according to GATX.
“This transaction is consistent with Wells Fargo’s ongoing strategy of simplifying our businesses and focusing on products and services that are core to our clients,” David Marks, executive vice president with Wells Fargo Commercial Banking, said in a press release.
GATX (NYSE: GATX) will own 30% of the joint venture and will manage the equipment from both the joint venture and the separate Brookfield transaction. GATX, which has an extensive international rail equipment leasing business, has an option to eventually acquire 100% ownership of the joint venture.
“This is an outstanding opportunity to build on GATX’s leading North American platform,” GATX CEO Robert C. Lyons said in a press release. “… Importantly, by acquiring the assets in this manner, we will maintain the financial flexibility and capacity to continue growing all of our businesses while capitalizing on the value creation opportunities inherent in the assets acquired.”
Brookfield, an international firm with 67% of its operations in North America, is owner of shortline holding company Genesee & Wyoming. Its holdings operate more than 22,500 miles of rail lines worldwide.
The transaction is expected to close by the first quarter of 2026.
Related:
Railcar lessor GATX profit up on fleet utilization, lease renewal rates
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