Canadian National to acquire bulk carrier
Canadian National Railway Co. said it plans to acquire a rail and bulk vessel, transportation company serving the steel industry, pending U.S. regulatory approval.
Canadian National said it has reached agreement with Great Lakes Transportation LLC to buy two short-line railroads, a switching company and a fleet of Great Lakes vessels for $380 million.
The integration of steel delivery networks expands Canadian National's bulk steel service capability between Western Canada and Chicago, the railroad said.
Canadian National acquisitions include:
* The Duluth, Missabe and Iron Range Railway Co., a 212-mile railroad with $89 million in turnover, carries iron ore from Minnesota's Mesabi iron range to Iowa and Wisconsin for transfer to connecting railroads or lake vessels serving steel mills in the East, South or Midwest. Key customers are U.S. Steel and Ispat-Insland Steel.
* The Bessemer and Lake Erie Railroad Co., a small railroad with $44 million in annual revenue, primarily carries coal and iron ore between the Lake Erie port of Conneaut, Ohio and blast furnaces in the Pittsburgh area. Key customers include U.S. Steel, Ontario Power Generation and AK Steel.
* The Pittsburgh & Conneaut Dock Co., a switching railroad that handles ship-to-rail and rail-to-ship transfers for the Bessemer and Lake Erie.
* Great Lakes Fleet Inc., which operates eight bulk vessels on the Great Lakes.
'CN's acquisition of the GLT carriers will drive new efficiencies in our network, improve customer service, preserve competition and expand our participation in the steel industry's bulk materials supply chain,' President E. Hunter Harrison said in a statement.
The transaction must be approved by the U.S. Surface Transportation Board (STB), the Federal Trade Commission and the Justice Department. Canadian National expects to close the deal by the middle of 2004 assuming the STB treats the transaction as a minor one under its merger rules.