STB Rules CSX-Pan Am Deal is ‘Significant’

The U.S. Surface Transportation Board announced on Thursday it will review the CSX acquisition of New England regional Pan Am Railways as a “significant” transaction that will be subject to more intense review.

The STB thus rejected CSX’s contention that the deal is a “minor” one that would receive less scrutiny from regulators.

In a draft notice published in the Federal Register, the STB said it could not determine based on the current record whether the CSX-Pan Am deal “clearly would not have any anticompetitive effects.”

In particular the board said the competitive impact of CSX acquiring Pan Am Southern was unclear.

Pan Am and Norfolk each hold 50 percent ownership stakes in Pan Am Southern, which was created to give NS a way to serve the New England region.

CSX has proposed assuming Pan Am’s ownership share of Pan Am Southern but having a subsidiary of short line railroad conglomerate Genesee & Wyoming operate it as a “neutral” party.

Had the STB agreed to review the CSX-Pan Am deal as a minor transaction it might have meant the deal could be finished by September. Now, the earliest that the deal can be concluded is December assuming a 270-day review period.

CSX will be required to submit to the STB a more detailed merger application.

The Class 1 carrier has argued that its acquisition of Pan Am will not adversely affect railroad competition in New England because it is an end-to-end merger.

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