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Watco to take over CN’s noncore operations in Ontario, Upper Midwest

Takeover pending regulatory approval from Surface Transportation Board

Watco has agreed to acquire some noncore assets from CN. (Photo: CN)

Canadian railway CN (NYSE: CNI) and short line operator Watco have agreed to allow Watco to take over the freight operations at one of CN’s passageways between the U.S.-Canadian border. 

CN will sell to Watco its noncore lines and assets that are on the Soo division, which consists of approximately 250 miles of track and runs from Sault Ste. Marie to Oba, Ontario. The sale also consists of approximately 650 miles of branch lines of the Wisconsin Central in Wisconsin and Michigan. The Wisconsin Central was a CN subsidiary. 

CN started the process to sell these noncore assets and lines in July 2020, and Tuesday’s announcement acknowledges the conclusion of that process, CN said. 

The terms weren’t disclosed and the acquisition is pending regulatory approval by the Surface Transportation Board.


In Ontario, Watco will continue freight operations as well as the Agawa Canyon Train Tour, CN said. Watco has also signed a memorandum of understanding with the Missanabie Cree First Nation regarding partnership opportunities for the Algoma Central Railway, the railway said.

Meanwhile, in the U.S. and Ontario, the lines will remain connected to CN’s tri-coastal network and CN “will continue to play a central role” in those segments, CN said.

Indeed, CN plans to maintain its presence in the Upper Midwest, saying last December that it would be opening an inland distribution terminal in New Richmond, Wisconsin. The facility, which recently opened, has an automotive compound for finished vehicles, as well as an intermodal terminal for shippers and receivers of greater Minneapolis and St. Paul, Minnesota.

CN expects to release its financial results for the first quarter of 2021 on April 26.


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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.