Wells Fargo Offloads $4.4 Billion Rail Assets to New Joint Venture

Published 2 hours agoWFC

Wells Fargo Offloads $4.4 Billion Rail Assets to New Joint Venture

Wells Fargo has struck a deal to sell its $4.4 billion rail equipment leasing business to a fresh joint venture between GATX Corporation and Brookfield Infrastructure. The transaction includes Wells Fargo's entire rail operating lease, featuring around 105,000 railcars. Additionally, the rail finance lease portfolio, comprising roughly 23,000 railcars and 440 locomotives, will be acquired by Brookfield Infrastructure separately.

In terms of ownership, the joint venture will initially see GATX holding a 30% stake while Brookfield Infrastructure will take 70%. GATX also retains an option to eventually buy full ownership, and they will be responsible for all commercial and operational management of the venture. According to Reuters, these details underscore the strategic roles each company will play in the partnership.

Wells Fargo has explained that this transaction fits into its broader strategy to simplify its operations and concentrate on its core client-focused services. Despite the size of the deal, it is not projected to majorly impact Wells Fargo's financial stance or earnings. This move follows their earlier acquisition of GE’s railcar leasing business in 2015, which significantly expanded its fleet.

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