GM to sell Electro-Motive Division

Railway Age, Feb, 2005

General Motors Corp. has agreed 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 rail 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.