An unnamed subsidiary of ITE Rail Fund has signed a definitive agreement to acquire American Railcar Industries (ARI) for around $1.75bn, including debt.
ARI is a majority-owned subsidiary of Icahn Enterprises’ (IEP) and is involved in the design and manufacturing of hopper and tank railcars. The company also provides railcar repair services from mini-shops and mobile units.
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The ITE Rail Fund subsidiary will merge with ARI at a price of $70 per share.
Completion of the deal is scheduled by the last quarter of this year but is subject to termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Icahn Enterprises chairman Carl Icahn said: “ARI is one of America’s great companies.
“As one of the leading railcar manufacturers, it has played an important role in infrastructure development and economic growth throughout North America.”
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By GlobalDataIn 2010 IEP first bought its majority share in ARI. The latest deal has enabled IEP to generate a total return of 423%, for a profit of around $757.2m.
IEP completed the sale of its indirect wholly-owned subsidiary Federal-Mogulto Tenneco in a deal valued at $5.4bn.
