Icahn Enterprises LP (IEP.O) said on Monday it would sell wholly owned subsidiary American Railcar Leasing LLC to SMBC Rail Services LLC in a deal based on an enterprise value of $2.78 billion and a fleet of about 29,000 railcars.
SMBC, part of Japan's Sumitomo Mitsui Financial Group Inc (8316.T), will have an option to buy additional 4,800 railcars for about $586 million, three years after the expected close in mid-2017.
The additional purchase would increase the total price to $3.36 billion, Icahn Enterprise said.
Icahn Enterprises' shares were down 3.5 percent at $59.00 in afternoon trading.
Sumitomo Mitsui Banking Corp bought the Chicago-headquartered Flagship Rail Services LLC in December 2013 and renamed it SMBC Rail.
SMBC Rail was founded in 2006 as AIG Rail Services Inc.
Deutsche Bank Securities Inc is American Railcar's financial adviser and Thompson Hine LLP the legal counsel.
(Reporting by Rachit Vats in Bengaluru; Editing by Sriraj Kalluvila)