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Updated: Freightliner sold to US rail firm

[ February 25, 2015   //   ]

UK and international rail operator Freightliner has been sold to Genesee & Wyoming (G&W), a US-based railroad company.

G&W has entered into an agreement to acquire Freightliner Group from Arcapita, Freightliner’s majority shareholders since 2008.

The new owners said there would be no impact on the day to day operations of the Group and its subsidiaries. All existing arrangements for each of Freightliner’s operating companies together for all staff will remain unaltered.

Bahrain-based Arcapita, which bought Freightliner in 2008, announced in November that the company was up for sale. While press reports at the time suggested it could fetch up to £400 million ($630 million), G&W said in a statement that its purchase of about 95% of Freightliner Group shares from Arcapita and other shareholders would cost it about £490 million or $755 million . The new owners would assume around £8.5 million in net debt and capitalized leases. Members of the existing Freightliner management team will retain about 5% ownership for now, but G&W will own the whole company by mid-2020. The acquisition is expected to close during the first quarter of 2015.

Freightliner chief executive Russell Mears said the change of ownership would bring “additional investment firepower, extended international reach and increased infrastructure expertise to add to the existing strengths of the Freightliner Group. Their commitment to safety and service quality in all activities also mirrors our own values.”

The US company’s president and chief executive, Jack Hellmann, said the Freightliner buy would spearhead his company’s drive into Europe. He said: “We are excited to be adding a world class intermodal and heavy haul franchise in the UK that will be the foundation of G&W’s European Region. Further, the overlap of our respective rail businesses in Australia and the Netherlands will unlock operating synergies and expand our presence in each of those markets. We are pleased to be joined by a highly talented management team who have a long track record of success in building Freightliner over the past two decades.”

G&W is known mainly as a “short line” and regional freight railroad operator in the US and it also has operations in Australia, Canada, the Netherlands and Belgium, with 15,000 miles of owned and leased track, 5,200 employees and over 2,000 customers. It also operates the 1,400-mile Tarcoola to Darwin rail line in Australia. G&W subsidiaries also provide rail service at 37 ports in North America, Australia and Europe.

Earlier this week, Freightliner said it was part of a British consortium that has won a contract from the Saudi Railway Company to provide management and technical support for freight, infrastructure and passenger operations on the new North South Railway (NSR).

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