Babcock Group to Buy RBS Train Unit for $7 Billion (Update1) By...

Babcock Group to Buy RBS Train Unit for $7 Billion (Update1)

By Makiko Kitamura

June 13 (Bloomberg) -- Babcock & Brown Ltd., Australia's second-biggest securities firm, and partners agreed to buy Royal Bank of Scotland Plc's train-leasing unit for 3.6 billion pounds ($7 billion) because of rising rail travel in the U.K.

Other investors in the group buying Angel Trains Ltd. include AMP Capital Investors, Deutsche Bank AG and funds advised by Access Capital Advisers, Sydney-based Babcock said in an Australian stock exchange statement today.

Babcock and its partners will buy one of three rolling-stock leasing companies in the U.K., a country where passenger rail travel has jumped by a half over the last decade. The acquisition will raise Babcock's stake in rail assets worldwide to more than A$9 billion ($8.5 billion), including 26,000 rail cars and locomotives, according to the statement.

``Following this transaction Babcock & Brown and its managed funds will be one of the world's leading integrated rail- financing groups, establishing a strong platform to expand our interests in rail projects around the world,'' Chief Executive Officer Phil Green said in the statement.

Angel Trains provides about 4,100 passenger train vehicles and 280 freight locomotives to rail companies in the U.K., including South West Trains and Virgin West Coast. The company also has operations in 11 continental European countries.