General Electric Co. (GE) said Wednesday that it has reached separate agreements to sell its tank car fleet assets and railcar repair facilities to Marmon Holdings, Inc., a Berkshire Hathaway Inc. company, and its remaining railcar leasing business, General Electric Railcar Services LLC, to Wells Fargo & Co. (WFC).
Terms of the deals were not disclosed.
GE Railcar Services leases a broad range of railcars as well as locomotives to shippers and railroads across North America.
The sale of the tank car assets is effective immediately and closed today. The sale of the railcar repair facilities is expected to close in the fourth quarter of 2015. The sale of the remaining railcar leasing business is expected to close by the end of the first quarter of 2016.
When completed, the Rail deals, which represent about $4.0 billion of ending net investment , will contribute about $1.3 billion of capital to the overall target of about $35 billion of dividends expected to GE under that plan.
Earlier Wednesday, Mubadala GE Capital Ltd, a joint venture between GE Capital and Mubadala Development Co., announced the sale of substantially all of its assets to MidCap Finco Ltd. MidCap is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, LLC. The deal is expected to close in the fourth quarter of 2015.
Additionally, GE on Wednesday completed the sale of its Mexican, Australian, and New Zealand fleet businesses to Element Financial Corp. (EFN.TO). Element acquired GE's U.S. fleet services business in August. The completion of the sale of GE's European fleet businesses to Arval, a fully owned subsidiary of BNP Paribas, is expected to close in the fourth quarter.
With signing of the Rail and Mubadala deals, the total for announced sales year-to-date is about $95 billion.
"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 CEO. "We expect to be substantially done with our exit strategy by the end of 2016."
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