EMD General Motors
- 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
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