Wells Fargo & Company (NYSE:WFC) on Thursday disclosed a definitive deal to divest the assets of its rail equipment leasing division to a newly formed joint venture between GATX Corporation (NYSE:GATX) and Brookfield Infrastructure Partners LP (NYSE:BIP) for $4.4 billion.
In particular, the joint venture will acquire around 105,000 railcars from Wells Fargo.
The joint venture will initially be owned 30% by GATX and 70% by Brookfield Infrastructure, with GATX retaining the option to eventually acquire full ownership.
Also Read: Goldman Sachs Bets On JPMorgan, Praises Market Share Gains, Efficiency
The deal is anticipated to close by the first quarter of 2026 or earlier, pending customary regulatory approvals and closing conditions.
David Marks, Executive Vice President with Wells Fargo Commercial Banking, said, “This transaction is consistent with Wells Fargo’s ongoing strategy of simplifying our businesses and focusing on products and services that are core to our clients,”
Robert C. Lyons, president and chief executive officer of GATX 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.”
In April, Wells Fargo reported first-quarter GAAP EPS of $1.39, beating the consensus of $1.34 and revenue of $20.15 billion, which was below the street view of $20.75 billion.
Also, Wells Fargo unveiled a new $40 billion stock repurchase program, set to commence after the current buyback concludes.
Investors can gain exposure to the stock via First Trust Nasdaq Bank ETF (NASDAQ:FTXO) and Invesco KBW Bank ETF (NASDAQ:KBWB).
Price Action: WFC shares are trading lower by 0.08% to $74.45 premarket at last check Friday.
Read Next:
Photo by Bumble Dee via Shutterstock