Report: EMD Sale Close
According to Reuters in Detroit, General Motors Corp. is close to a deal to sell its Electro-Motive Division (EMD) business to two private U.S. equity firms. If the deal is finalized, which reportedly is contingent upon a new union contract, it will end more than two years of negotiations, including a rumored deal with Caterpillar Inc. that did not materialize.
Reuters said GM has agreed to the terms of a joint purchase agreement for EMD with Greenbriar Equity Group, and Boston-based Berkshire Partners. While details are understandably sketchy, Reuters said GM would sell the business for less than $1 billion.
EMD, which employs about 3000 workers, is one of the world's largest manufacturer of diesel-electric train locomotives with operations in LaGrange, Ill. and London, Ontario, Canada. It also builds diesel power engines for boats, oil rigs and gen-sets.
Greenbriar and Berkshire Partners have worked closely together in the past, having jointly invested in Active Aero Group, an air cargo company, and Hexcel Corp., a maker of lightweight structures for the aerospace industry, in 2003. The equity firms have earmarked more than $1 billion to acquire companies in the transportation sector, Berkshire said on its Web site. Berkshire has acquired other railroad companies in the past, including Wisconsin Central Transportation Corp., New Zealand Rail and the rail freight operations of British Rail.