GATX and Brookfield Infrastructure form a joint venture and enter into an agreement to acquire Wells Fargo’s rail operating lease portfolio, composed of approximately 105,000 railcars
Additionally, Brookfield Infrastructure enters into an agreement to directly acquire Wells Fargo’s rail finance lease portfolio, composed of approximately 23,000 railcars and approximately 440 locomotives
GATX to serve as manager of the railcars in the joint venture and the finance lease railcars and locomotives directly owned by Brookfield Infrastructure
GATX Corporation announced a definitive agreement to acquire approximately 105,000 railcars from Wells Fargo for $4.4 billion through a newly formed joint venture with Brookfield Infrastructure Partners L.P. (“BIP”) and its institutional partners (collectively, “Brookfield Infrastructure”). Initial joint venture equity ownership will be GATX (30%) and Brookfield Infrastructure (70%), with GATX having the option to acquire 100% of the joint venture equity over time.
GATX’s global portfolio of assets includes tank and freight railcars, commercial aircraft spare engines, and tank containers. BIP is the flagship listed infrastructure company of Brookfield Asset Management, a leading global alternative asset manager, with over $1 trillion of assets under management.
“This is an outstanding opportunity to build on GATX’s leading North American platform,” said Robert C. Lyons, president and chief executive officer of GATX. “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 capitalizing on the value creation opportunities inherent in the assets acquired.”
Mr. Lyons added, “We will work closely with customers to ensure an efficient transition to GATX’s commercial and operational platform. The acquisition will enhance GATX’s fleet diversification, providing additional opportunities to serve our customers. In the first full year after closing, we expect the impact of the transaction to be modestly accretive to earnings per share, with more material contributions thereafter.”
The transaction is subject to customary closing conditions, including required regulatory approvals and clearances, and it is expected to close in the first quarter of 2026 or sooner.
Advisors
BofA Securities acted as the sole financial advisor to GATX and Brookfield Infrastructure.
Mayer Brown is serving as legal counsel to GATX. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Brookfield Infrastructure.
Transaction Details
The following information relates to the newly formed joint venture between GATX and Brookfield Infrastructure and the agreement to acquire the rail operating lease portfolio, composed of approximately 105,000 railcars:
Joint Venture Structure
Initial equity ownership in the joint venture will be shared between GATX (30%) and Brookfield Infrastructure (70%).
GATX will have commercial and operational control of the joint venture assets and will manage all assets on behalf of the partners.
GATX will hold a series of annual call options that, if exercised, will enable GATX to acquire up to 100% of Brookfield Infrastructure’s equity interest over time. If each annual call option is exercised, GATX would acquire Brookfield Infrastructure’s equity interest in 10 years or less.
GATX’s initial equity contribution will be approximately $400 million and will be funded through general operating cash flow and financing activity. Future call options, if exercised, also will be funded through general operating cash flow and financing activity and will fit manageably within GATX’s ordinary capital investment plan.
It is expected that the joint venture will be a static pool of assets. GATX’s current and future investment and growth initiatives across its businesses are expected to be unaffected by this acquisition.
Joint Venture Financing
In addition to the partner equity contributions, Wells Fargo Securities, LLC, BofA Securities, MUFG Bank Ltd., and Sumitomo Mitsui Banking Corporation (SMBC) are providing the joint venture with a fully underwritten $3.2 billion 5-year unsecured term loan and a $250 million unsecured revolving credit facility.
Financial Statement Impact
Given GATX’s commercial and operational control of the joint venture assets, it is expected that the joint venture will be consolidated on GATX’s financial statements.
It is expected that Brookfield Infrastructure’s initial joint venture equity contribution, a Non-Controlling Interest (“NCI”), will be presented on GATX’s balance sheet as common equity.
GATX’s post-acquisition credit and return metrics are expected to be generally in line with current metrics.
The Wells Fargo Rail Assets Acquired
The 105,000 railcar operating lease portfolio consists primarily of freight cars (95%), spread across a diverse mix of specific car types.
Current fleet utilization is approximately 97%.
TELECONFERENCE INFORMATION
GATX Corporation will hold an investor call on the morning of May 30, 2025 to discuss the transaction. Call details are as follows:
Date:
May 30, 2025
Time:
9:00 a.m. (Eastern Time)
Domestic Dial-In:
1 (800) 715-9871
International Dial-In:
1 (646) 307-1963
Live Webcast:
www.gatx.com
Replay: 1-800-770-2030 (or 1-609-800-9909 International) / Access Code: 8822283
Call-in details, a copy of this press release, related presentation materials and real-time audio access are available at www.gatx.com. Please access the call 15 minutes prior to the start time. A replay will be available on the same site starting at 2 p.m. (Eastern Time), May 30, 2025.
