USA: Wells Fargo & Co has entered into a definitive agreement to sell the assets of its rolling stock leasing business to a joint venture of GATX Corp and Brookfield Infrastructure.
A newly-formed joint venture of GATX and Brookfield has agreed to acquire the operating lease portfolio of 105 000 wagons of various types for $4·4bn. Brookfield will also directly acquire the finance lease portfolio of 23 000 wagons and 440 locomotives. GATX will manage both fleets.
‘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’, said David Marks, Executive Vice-President of Wells Fargo Commercial Banking, on May 29.
GATX has a 30% stake in the joint venture, with the option to acquire 100% over time. Its initial equity contribution of $400m will be funded through general operating cash flow and financing activity, and any increases in its stake would also be funded within its ordinary capital investment plan. It is expected that the joint venture will be a static pool of assets.
In addition to the partner equity contributions, Wells Fargo Securities, BofA Securities, MUFG Bank and Sumitomo Mitsui Banking Corp are providing the joint venture with a fully underwritten $3·2bn five-year unsecured term loan and a $250m unsecured revolving credit facility.
‘This is an outstanding opportunity to build on GATX’s leading North American platform’, said GATX President & CEO Robert C Lyons on May 29. ‘We have developed unique asset, commercial and operational expertise that positions us to acquire and integrate this fleet. 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.’
The transaction is subject to regulatory approvals and is expected to close in Q1 2026 or sooner.
BofA Securities acted as financial adviser to GATX and Brookfield Infrastructure. Mayer Brown is serving as legal counsel to GATX. Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel to Brookfield Infrastructure.
Wells Fargo Securities served as exclusive financial adviser and Simpson Thacher & Bartlett as legal counsel to Wells Fargo.
