Wells Fargo & Co has agreed to divest the assets of its rail equipment leasing business to a newly formed joint venture between Brookfield Infrastructure Partners and GATX Corporation, marking a significant step in the bank’s ongoing strategic realignment towards core banking operations, according to a report by Bloomberg.
The transaction encompasses a $4.4bn portfolio of rail operating lease assets, as well as a sizeable rail finance lease book. While financial terms of the deal were not disclosed, Wells Fargo stated that the transaction is not expected to have a material impact on earnings and is slated to close by early 2026.
This move follows CEO Charlie Scharf’s broader initiative to streamline the bank’s portfolio, shedding non-core units including asset management and corporate trust services. The rail leasing exit marks the culmination of plans first announced in 2021.
As part of the agreement, GATX and Brookfield Infrastructure have established a joint venture that will acquire approximately 105,000 railcars from Wells Fargo. Brookfield will initially hold a 70% stake, with GATX owning the remaining 30%. Under the terms, GATX retains the option to acquire full ownership of the platform over time. GATX’s initial equity commitment totals $400m.
Separately, Brookfield Infrastructure will directly acquire Wells Fargo’s rail finance lease assets, comprising approximately 23,000 railcars and 440 locomotives.
GATX will maintain commercial and operational control of the JV’s assets, overseeing day-to-day management and customer engagement. The combined platform includes rolling stock originally acquired by Wells Fargo through its 2015 purchase of GE’s railcar business, which now spans over 135,000 railcars and 850 locomotives used across key commodities sectors including agriculture, energy, and construction materials.
Debt financing for the transaction is being provided by a consortium including Wells Fargo Securities, BofA Securities, MUFG Bank, and Sumitomo Mitsui Banking Corporation. The financing package includes a $3.2bn five-year unsecured term loan and a $250m unsecured revolving credit facility.
The announcement comes amid Wells Fargo’s continued efforts to exit legacy enforcement actions. On the same day, the Office of the Comptroller of the Currency terminated a set of 2015 regulatory orders – bringing the firm closer to lifting the asset cap imposed in 2018.
