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Wells Fargo Unit Pens Deal to Buy GE Railcar Services

Banking giant Wells Fargo & CompanyWFC inked yet another deal with GE Capital, an arm of Connecticut based-General Electric Company GE . First Union Rail - the railcar finance, leasing and fleet management business of Wells Fargo - has entered into an agreement to acquire GE Railcar Services from GE Capital. The deal is expected to close by first-quarter 2016.

The financial terms of the deal with Wells Fargo remain undisclosed. However, Wells Fargo stated that the deal will add over 77,000 railcars and around 1,000 locomotives to its existing fleet and make First Union Rail, the second largest railcar and locomotive leasing company in North America.

With its presence dating back to 1994, First Union Rail currently serves more than 500 customers in North America offering a range of customized finance and operating lease structures, along with marketing and transportation management services.

While the latest deal enhances Wells Fargo's financial services business, for GE, the move is in line with its efforts to trim down its financial wing and focus more on its core industrial business.

Notably, Wells Fargo and The Blackstone Group L.P. BX helped GE in commencing its finance overhaul in April by agreeing to purchase real estate assets worth about $23 billion.

Concurrently, GE entered agreement to sell its tank car fleet assets and railcar repair facilities to Marmon Holdings, Inc., a unit of Berkshire Hathaway Inc. (BRK.A) BRK.B ). Also, Mubadala GE Capital Ltd, a joint venture between GE Capital and Mubadala Development Company, announced the sale of most of its assets to MidCap Finco Ltd.

Currently, Wells Fargo sports a Zacks Rank #2 (Buy) while GE carries a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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