GE Railcar-Leasing Business Lures Suitor – WSJ

Sumitomo Mitsui Financial Group Inc. is interested in buying General Electric Co.’s U.S. railcar-leasing business, people familiar with the matter say. This from the Wall Street Journal Asia edition.

It is cited as the latest example of Japanese financial institutions looking for significant purchases in the U.S.

China companies could also be a buyer.

GE Capital Rail Services could be valued at roughly $4 billion some report.

GE Capital Rail Services leases and manages boxcars, tank wagons and other railroad freight equipment in North America.

SMFG—Japan’s second-largest lender by market value, after Mitsubishi UFJ Financial Group Inc.—has been expanding in leasing. It bought Chicago-based railroad-leasing firm Flagship Rail Services from Perella Weinberg Partners LP for roughly $500 million in 2013. The latter is now called SMBC Rail Services.

People familiar with SMFG’s thinking said the bank considers rail leasing to be a higher-margin business that can supplement its lower-margin core lending business at home.

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