US-based Icahn Enterprises has signed an agreement to sell its indirectly wholly owned subsidiary American Railcar Leasing (ARL) to SMBC Rail Services for $3.364bn.

As part of the agreement, Icahn will also sell a fleet of 29,000 railcars to SMBC Rail, a wholly owned subsidiary of Sumitomo Mitsui Banking.

Sellers will have an option to sell for three years subsequently, with SMBC Rail able to purchase 4,800 additional railcars.

Should all the conditions to the option be met, 4,800 additional railcars would be purchased for $586m at the time of the initial closing.

Icahn chairman Carl Icahn said: "I have been in the railcar business for over 30 years. During that time we have built one of the leading railcar fleets in the world.

"If lined up, ARL’s fleet would stretch from New York City to the middle of Ohio."

“In fact, if lined up, ARL's fleet would stretch from New York City to the middle of Ohio."

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By GlobalData

Set to produce a full service lessor of long-lived rolling stock, the deal will offer comprehensive rail leasing solutions in North America, with a combined fleet of more than 50,000.

SMBC Rail president and CEO Gene Henneberry said: "The combined fleet of SMBC Rail and ARL is an example of two complementary businesses coming together to provide better solutions for our customers.

“This portfolio will be one of, if not the youngest, most efficient, diversified fleets in the industry."

Subject to customary closing conditions, including the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, the sale is expected to close in the second quarter of next year.