Icahn Enterprises to sell American Railcar Leasing to SMBC Rail in a $3.36-bn deal

Activist investor Carl Icahn's investment firm, Icahn Enterprises LP yesterday struck a deal to sell its wholly-owned subsidiary American Railcar Leasing (ARL) to SMBC Rail Services for an enterprise value of $2.78 billion and a fleet of about 29,000 railcars.

Under the terms of the deal, Icahn Enterprises will receive cash based on an enterprise value of $2.78 billion and a fleet of 29,000 railcars.

SMBC, a subsidiary of Sumitomo Mitsui Banking Corp, will have an option to buy an additional 4,800 railcars for $586 million, three years after the expected close in mid-2017.

The additional purchase would take the total acquisition price to $3.36 billion.

Founded in 2004 and based in Saint Charles, Missouri, ARL manages over 40,000 railroad tank and covered hopper cars and serves the petroleum, chemical, food, agriculture, fertilizer and plastic pellet markets.

"I have been in the railcar business for over 30 years. During that time we have built one of the leading railcar fleets in the world.  In fact, if lined up, ARL's fleet would stretch from New York City to the middle of Ohio,'' said, Carl Icahn, chairman of Icahn Enterprises.

''I am very proud of the business we have built at ARL and am pleased that SMBC Rail Services also sees the tremendous value in this business.  This transaction is a good example of how Icahn Enterprises delivers substantial returns for our equity holders," he added.