The Greenbrier Companies and Tokyo-based MUL completed agreements to expand their existing commercial relationship in North America consistent with the parties’ memorandum of understanding announced in April. In addition, Greenbrier Europe and Astra Rail completed their merger, forming Greenbrier-Astra Rail.

MUL intends to grow its portfolio from 5,000 railcars to a total of 25,000 railcars over the next four years.  As part of these growth plans, MUL has entered a multi-year purchase commitment for 6,000 newly-manufactured railcars from Greenbrier, with deliveries commencing during Q4/17 and continuing through 2020. MUL will obtain all its newly-manufactured railcars exclusively from Greenbrier through 2023.

In addition to the new equipment ordered, over the next several years, MUL will supplement its portfolio growth through a combination of lease syndications and used equipment originated and owned by Greenbrier.  The combined value of these transactions exceeds $1 billion.

The parties have also formed MUL Greenbrier Management Services, a new railcar management services entity owned 50% by each company that will solely manage all railcars in the MUL fleet. Greenbrier will receive continuing fee income related to the ongoing railcar asset management services provided for the MUL fleet.

“Greenbrier is pleased to extend its business relationship with MUL with these recently signed agreements and the formation of MUL Greenbrier Management Services. This expanded relationship with MUL demonstrates our earned reputation of providing tailored solutions to our customers. We take pride in the series of transactions we have completed with our friends at MUL and look forward to our continuing work together,” said William A. Furman, chairman and CEO of Greenbrier.

MUL President and CEO Tadashi Shiraishi said, “MUL has set an ambitious target to increase MUL’s market share to a level that places it among North America’s top 8 leading operating lessors of railcars.  We value Greenbrier’s ability to build high-quality freight railcars and assist MUL with high-value railcar management services to support MUL’s rapidly expanding fleet.”

The Greenbrier-Astra Rail combination creates Europe’s largest end-to-end freight railcar manufacturing, engineering and repair business to reach markets throughout Europe, Eurasia and Gulf Cooperation Council (GCC) countries like Saudi Arabia. It is expected that Greenbrier-Astra Rail will be accretive to Greenbrier’s annual earnings per share by $0.15-$0.35, beginning in fiscal 2018.

“The creation of Greenbrier-Astra Rail extends Greenbrier’s commitment to global diversification while providing scale and greater value to our customers in Europe,” Furman said. “We are excited to unify the creative and capable management teams from both companies to deliver world-class innovation to our freight railcar customers in Europe and beyond. Together with our investments in Saudi Arabia, Brazil and Mexico, Greenbrier has substantially grown our international footprint over the last several years to create a truly global network. We look forward to an expanded presence in Europe, while we also address developing markets in the GCC, Africa and Eurasia.”

Greenbrier-Astra Rail includes all European operations of Greenbrier and Astra Rail including six railcar manufacturing sites and railcar repair facilities in addition to sales, administration and engineering offices.