The Greenbrier Companies today announced the execution of a definitive agreement concerning its earlier announced intent to increase ownership in Amsted-Maxion Equipamentos E Serviços Ferroviários S.A. ("Greenbrier-Maxion") from 19.5% to 60%. Located near São Paolo, Brazil, Greenbrier-Maxion is the leading South American railcar manufacturer, with over 60% share of new railcar production in Brazil. Greenbrier-Maxion also offers a range of aftermarket services including railcar overhaul and refurbishment to address an aging railcar fleet, with more than 60% of the fleet at 30 years of age or older.

Greenbrier's $20 million investment will be used to retire debt at Greenbrier-Maxion thereby reducing interest payments by $4 million annually. The purchase option dates to May 2015 when Greenbrier obtained its initial 19.5% ownership of Greenbrier-Maxion. With the option exercise, the equity interest of Amsted-Maxion Fundição E Equipamentos Ferroviários S.A. ("Amsted-Maxion Cruzeiro") will be reduced from 80.5% to 40%.

Simultaneously with the closing of its investment into Greenbrier-Maxion, Greenbrier will increase its ownership stake in Amsted-Maxion Cruzeiro from 19.5% to 24.5% for $3.25 million. Based in Cruzeiro, Brazil, Amsted-Maxion Cruzeiro is a manufacturer of various castings and components for railcars and other heavy industrial equipment. Cruzeiro is well-integrated with the operations of Greenbrier-Maxion and draws on the experience of Amsted Rail, with whom Greenbrier currently partners in a U.S.-based castings facility. Amsted Rail is the global leader in railcar bogie and component systems which includes truck castings, tapered roller bearings, railway wheels, axles and braking products. Additionally, Amsted Rail has introduced its Motion Control™ bogie technology in South America to combine with new wagon technology from Greenbrier-Maxion. Amsted-Maxion Cruzeiro also benefits from its affiliation with Iochpe-Maxion, S.A., a prominent, publicly-held, Brazilian-based global auto parts supplier, which provides access to customer and supplier relationships.

Proceeds from Greenbrier's increased ownership in Cruzeiro, along with loans from the partners, will reduce interest costs by approximately $3 million per year. Greenbrier will retain an option to increase its ownership in Amsted-Maxion Cruzeiro to 29.5% subject to certain conditions.

With an enhanced ownership position in both companies, Greenbrier expects to enjoy greater benefits from the expected economic growth and infrastructure development in Brazil. When completed, Greenbrier's investments in Greenbrier-Maxion and Amsted-Maxion Cruzeiro will improve the capital structure of both companies, positioning each business for growth.

William A. Furman, Chairman and CEO of Greenbrier said, "Brazil's economic, business and political conditions are recovering and forecasts indicate positive GDP growth in 2017. Greenbrier's operations in Brazil, and our relationship with our partners Amsted and Iochpe, continue to yield positive results. Our facilities, which include the largest railcar assembly plant in South America, continue to gain momentum. In two short years we have already brought innovation to the South American railcar market. We introduced two new products to Brazil, a new triple hopper grain car and a modern double stack railcar design, drawing on our North American heritage as the leader in intermodal railcars. We are expanding our investments in Brazil to reach customers who need high quality transportation equipment and in pursuit of continued growth and further diversification of Greenbrier's global business into new markets. Our strong balance sheet enabled us to move quickly and decisively in seizing this opportunity."

Furman continued, "Our increased ownership allows us to use our core competency in manufacturing to drive operational efficiencies in these businesses. As Greenbrier becomes more active in the operations of both companies, we will evaluate opportunities to evolve our business model in South America to emulate our operations in North America where we provide a suite of diversified aftermarket offerings for railcars such as maintenance, parts, refurbishment, leasing and management services."

Following the closing of this transaction and the previously announced Astra Rail transaction in Europe, Greenbrier will be the leading railcar builder in South America and Europe, and the second largest railcar builder in North America with the ability to tap markets in all three continents, as well as reach customers in the nations of the Gulf Cooperation Council, Africa, and Eurasia. This global reach extends Greenbrier's leadership in railcar engineering, design and manufacturing and enables partnerships with established transportation equipment providers whose local presence and experience assists Greenbrier's growth in new regions.

Closing of the investments is contingent on meeting certain conditions, including the completion of antitrust approval in Brazil.