The Surface Transportation Board has approved CSX’s plan to acquire New England short line operator Pan Am Systems, putting to rest this merger proceeding.
Pan Am operates six subsidiary short lines. Its network extends from Maine to Boston and to Albany, New York.
In a Thursday announcement, the board said the acquisition, which includes voluntary commitments and settlement conditions agreed to by CSX, would not likely cause a substantial lessening of competition nor create a monopoly or restraint of trade.
STB also said the public interest of the merger would outweigh any anticompetitive effects. That public interest includes providing much-needed capital investments and consistent maintenance to the Pan Am network, marketing opportunities for single-line service and opportunities to compete with long-haul trucking.
The board’s 75-page decision is available here.
“After a searching review of the well-developed record in this proceeding, which included a two-day public hearing before the full Board, the Board concluded that this transaction satisfies the statutory criteria based on CSX’s representations to the Board,” said STB Chairman Marty Oberman. “I look forward to improvements in the rail network with respect to reliable service and competitive transportation options in New England and beyond.”
CSX announced its plans to acquire Pan Am in November 2020. The board ruled in March 2021 that CSX’s application must be filed as a “significant transaction,” which results in more scrutiny to ensure the preservation of market competition. A two-day hearing was held in January, with many of the region’s shippers in support of the acquisition.
In response to the decision, CSX President and CEO Jim Foote said in a release: “CSX is pleased that the STB approved the proposed acquisition of Pan Am and has recognized the significant benefits this transaction will bring to shippers and other New England stakeholders. We look forward to integrating Pan Am, their employees and the rail-served industries of the Northeast into CSX and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.”
CSX says the acquisition will close on June 1
“This much anticipated decision paves the way for an exciting new chapter for Pan Am customers and our employees as we begin our transition to the CSX team,” said Pan Am Railways President David A. Fink.