CSX (NASDAQ: CSX) will buy short line Pan Am Railways after all.
The Eastern U.S. railroad said Monday that it has signed a definitive agreement to acquire the railroad. Financial terms weren’t disclosed.
CSX has been considering purchasing the New England short line for weeks, according to reports.
CSX says Pan Am’s subsidiaries make Pan Am the largest regional railroad in North America. The short line operates nearly 1,200 miles of track across New England, with access to multiple ports and large-scale commodity producers. Pan Am also has a partial interest in Pan Am Southern.
The acquisition will add Vermont, New Hampshire and Maine to CSX’s 23-state network, and it will expand CSX’s presence in Connecticut, Massachusetts and New York, according to the company.
“In Pan Am, CSX gains a strong regional rail network in one of the most densely populated markets in the U.S., creating new efficiencies and market opportunities for customers as we continue to grow,” CSX President and CEO Jim Foote said. “We intend to bring CSX’s customer-centric focus and industry-leading operating model to shippers and industries served by Pan Am.
He continued, “We look forward to integrating Pan Am into CSX, with substantial benefits to the rail-served industries of the Northeast, and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.”
The Surface Transportation Board must still approve the transaction. CSX competitor Norfolk Southern (NYSE: NSC) had expressed concerns to the STB about potential conflicts since Norfolk Southern (NS) has joint control with Pan Am over Pan Am Southern, but CSX has said it has been in communication with NS over the transaction.
“Pan Am is pleased to reach this agreement with CSX, a North American leader in rail-based freight transportation,” said Pan Am Railways President David A. Fink. This is great news for New England shippers and the national freight network overall.”
Goldman Sachs will serve as financial adviser, and Davis Polk & Wardwell will serve as legal adviser to CSX in connection with the transaction.
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