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EMD General Motors

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  • Stephen G. Myers
    GM to sell Electro-Motive Division General Motors Corp. today announced an agreement to sell its Electro-Motive Division to an investor group led by Rye,
    Message 1 of 1 , Jan 20, 2005
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      GM to sell Electro-Motive Division
      General Motors Corp. today announced an agreement to sell its
      Electro-Motive Division to an investor group led by Rye, N.Y-based
      Greenbriar Equity Group LLC and Berkshire Partners LLC of Boston. The
      deal is expected to close in first-quarter 2005, contingent upon
      completion of negotiations with the United Auto Workers Union and
      subsequent member ratification. Terms of the transaction were not
      officially disclosed but are reportedly under $500 million. GM is said to
      be retaining a financial interest in EMD.

      The transaction covers substantially all EMD businesses, including North
      American and international locomotives; power, marine, and industrial
      products; the spare parts and parts rebuild business; and all worldwide
      EMD locomotive maintenance contracts. EMD's LaGrange, Ill., and London,
      Ont., manufacturing facilities are included in the transaction. In recent
      years, EMD has produced 500-600 locomotives annually for the global
      railway market.

      Berkshire Partners has a long history of railroad industry investment. It
      was a principal investor in Wisconsin Central Ltd., now part of CN, and
      WC's Tranzrail and English, Welsh & Scottish operations in New Zealand
      and Britain, respectively. Tranzrail was sold recently to New Zealand
      investors; Berkshire still retains an interest in EW&S with CN. Not long
      after its start-up in the late 1990s, EW&S ordered 250 Class 66 freight
      locomotives from EMD and 25 Class 67 EMD-powered units from Alstom.

      "Greenbriar and Berkshire Partners have a long-term commitment to
      creating value in the railroad industry that extends back to the 1980s,"
      said Reginald Jones, a managing partner of Greenbriar. "EMD has
      outstanding products, employees, and a truly global franchise, and we
      believe the company's prospects are bright."

      "GM is pleased to have Greenbriar and Berkshire Partners acquiring the
      company," said William Happel, GM vice president and EMD general manager.
      "These groups have a long-established reputation for excellence as rail
      industry investors and financiers. As an independent company with access
      to the resources of the new owners, EMD will be well positioned to
      continue to service its customers and grow the business."


      January 12, 2005
      Greenbrier
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