Air Cargo Quarterly
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SMFG buying Perella Weinberg’s U.S. railcar lease business
* SMFG paying $290-$490 million for company
* SMFG buying Chicago-based Flagship Rail Services
* Japanese banks remain active in overseas acquisitions By Taiga Uranaka
TOKYO, Dec 12 (Reuters) - Sumitomo Mitsui Financial Group said it will acquire the U.S. railcar leasing businessof Perella Weinberg Partners LP, illustrating the continuedappetite of Japanese banks for overseas assets.
Japan’s third-largest lender by assets did not discloseterms of the deal, but a source familiar with the matter saidthe bank is likely to pay 30-50 billion yen ($290-$490 million). In a statement issued on Thursday, Sumitomo Mitsui BankingCorp, a core unit of SMFG, said an increase in shale oil and gasproduction is driving up demand for rail freight transportationin the United States.
“The U.S. railcar leasing business will continue to bepositively impacted by robust overall demand from the U.S. railfreight transportation industry,” it said. The Japanese bank will buy Chicago-based Flagship RailServices LLC from a fund managed by Perella Weinberg PartnersLP.
The leasing company owns about 15,000 railcars and itsassets are valued at $1.1 billion, SMBC said in the statement. The fund, Perella Weinberg Asset Based Value Strategy, hadbought the railcar leasing business from American InternationalGroup in 2011.
Reuters reported in September thatPerella Weinberg was looking to sell Flagship Rail Services. Relatively unscathed by global the financial crisis fiveyears ago, Japanese banks have been aggressively snapping upassets overseas in their search for growth beyond a weak home market.
Earlier this year, SMFG agreed to buy 40 percent of BankTabungan Pensiunan Nasional Tbk PT in a deal valued at$1.5 billion. Last year, the Japanese bank and its partners acquired RoyalBank of Scotland’s aircraft leasing business for $7.3 billion.
The deal for RBS Aviation Capital, the world’s fourth-largestaircraft leasing company, instantly made SMFG a major player inthe industry.
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