GATX has entered a definitive agreement to purchase around 105,000 railcars from Wells Fargo for $4.4bn via its newly-established joint venture (JV) with Brookfield Infrastructure Partners and its institutional partners.
The initial equity ownership of the JV is divided between GATX, which holds 30%, and Brookfield Infrastructure, which holds 70%. GATX also has options to gradually acquire full ownership of the JV in the future.
GATX’s portfolio includes tank and freight railcars, aircraft spare engines, and tank containers.
The acquired portfolio, primarily freight cars (95%), has a 97% utilisation rate and a diverse mix of car types.
GATX president and CEO Robert Lyons said: “Throughout our 125-plus-year history, 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 capitalising on the value creation opportunities inherent in the assets acquired.”
Additionally, Brookfield Infrastructure has also agreed to acquire Wells Fargo’s rail finance lease portfolio, which includes around 23,000 railcars and approximately 440 locomotives.
GATX will act as manager of the railcars in the JV, as well as the finance lease railcars and locomotives owned by Brookfield Infrastructure.
GATX’s initial $400m equity contribution in the JV will be funded through operating cash flow and financing, with future call options, if exercised, allows the company to acquire Brookfield’s stake in ten years or less.
Besides the partner equity contributions, for the JV financing a completely underwritten $3.2bn five -year unsecured term loan and a $250m unsecured revolving credit facility is provided by Wells Fargo Securities, BofA Securities, MUFG Bank and Sumitomo Mitsui Banking Corporation (SMBC).
BofA Securities advised GATX and Brookfield Infrastructure. Mayer Brown is acting as legal counsel for GATX, while Skadden, Arps, Slate, Meagher & Flom is providing legal services to Brookfield Infrastructure.
The transaction, subject to regulatory approvals, is expected to close in the first quarter of 2026 or earlier.
