Posts Tagged ‘mergers and acquisitions’

CSX Completes Merger with Pan Am Railways

June 1, 2022

CSX completed its takeover of Pan Am Railways on Wednesday.

The New England-based regional railroad became a fallen flag at 12:01 a.m., six weeks after the U.S. Surface Transportation approved the merger.

The merger extends CSX farther into New England. The deal involves merging six railway companies into CSX and grants trackage rights to other carriers on lines of four other railroads, including CSX, Providence & Worcester, Boston & Maine, and Pan Am Southern.

Norfolk Southern gains a new route to move intermodal and automobile trains from Voorheesville, New Yori, to Ayer, Massachusetts.

The Pittsburg & Shawmut Railroad, a subsidiary of Genesee & Wyoming that does business as the Berkshire & Eastern Railroad, will replace Springfield Terminal as the operator of Pan Am Southern.

Federal regulators established a five-year oversight period to monitor the effectiveness of the various conditions they imposed on the merger.

CSX-Pan Am Merger to Close June 1

April 17, 2022

CSX said Thursday it will take over Pan Am Railways on June 1.

The Class 1 carrier received approval last week from the U.S. Surface Transportation Board to acquire Pan Am, which has a 1,200-mile route network in New England.

The merger will change the railroad scene in the region. Aside from CSX taking over Pan Am, Genesee & Wyoming subsidiary Berkshire & Eastern will operate the former Boston & Maine east of Ayer, Massachusetts.

That line, known as Pan Am Southern, will be owned 50-50 by CSX and Norfolk Southern.

CSX also gets Pan Am’s haulage rights to Saint John, New Brunswick, thus enabling it to compete with Canadian National and Canadian Pacific.

As part of the acquisition, CSX agreed to give Vermont Rail System trackage rights.

Amtrak will be allowed by CSX to operate trial intercity passenger service to Pittsfield, Massachusetts, from New York City.

During STB hearings on the merger, CSX said it would spend more than $100 million on infrastructure improvements to Pan Am track.

The STB did not issue a condition that the 147-year old Hoosac Tunnel be kept open. The tunnel has been subject to cave-ins in recent years.

STB Approves CSX Acquisition of Pan Am

April 15, 2022

The U.S. Surface Transportation Board has unanimously approved a bid by CSX to acquire Pan Am Railways and its seven short line subsidiaries. The merger will become effective on May 14.

The STB did impose some conditions on the merger as well as approve six related transactions, one of which was approving trackage rights by Norfolk Southern over lines of CSX, Providence & Wooster, Boston & Maine, and Pan Am Southern.

The NS trackage rights will enable it to move intermodal and automotive traffic via a new route to reach Ayer, Massachusetts.

Berkshire & Eastern will become the operator of Pan Am Southern. B&E is a subsidiary of short line conglomerate Genesee & Wyoming.

Although the U.S. Department of Justice had raised some concerns about the CSX-Pan Am merger, the STB ruled that NS “will have both the ability and the incentive to prevent CSX from taking actions that would impair PAS [Pan Am Southern].”

Canadian Pacific had also expressed concern that the merger could potentially harm it by leading to the downgrading of Pan Am Southern routes that it uses.

However, the Board noted that CP reached a settlement agreement with CSX and NS that “provides assurances that the Merger Transaction and Related Transactions will not ultimately undermine the PAS routes as a competitive option”

The STB also determined that B&E will have independent rate-setting authority that will be sufficient enough to ensure that Pan Am Southern rates “are not set in an anticompetitive manner.”

Regulators also said CSX pledged an open gateway policy that will ensure that Pan Am Southern “remains a competitive option, as it will allow other carriers that connect with the PAR System to continue offering competitive interline rates.”

CSX agreed to “waive its right under the Board’s ‘Bottleneck Cases’ to quote only long-haul rates, even when interline routes are possible,” the Board wrote.

The merger will extend the CSX network in Connecticut, New York and Massachusetts, while adding new routes to Vermont, New Hampshire and Maine.

Pan Am operates over a 1,200-mile network in New England and had an ownership stake in Pan Am Southern. The latter also is partly owned by NS.

CSX will acquire a 50 percent ownership share of Pan Am Southern as a result of the merger.

The STB said it would set a five-year oversight period over the merger during which it will monitor the “the effectiveness of the various conditions.”

Petitions for reconsideration of STB’s decision must be filed by May 4, 2022. Requests for stay must be filed by May 4, 2022.

The Board’s decision can be read at https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1649966599082/51144.pdf

CSX, Amtrak Reach Pact on Pan Am Merger

January 14, 2022

Amtrak and CSX reportedly have reached an agreement that will remove the passenger carrier’s opposition to the freight carrier’s plans to acquire Pan Am Railways.

Although the two railroads have reached agreements on several items, Railfan and Railroad reported on its website that Amtrak said there are still some sticking points.

On Jan. 3 Amtrak had said it would oppose the CSX-Pan Am merger unless it received some specific concessions that deal with existing and potential new intercity rail passenger service in New England.

In the latest development, Amtrak said CSX has accepted six of the conditions Amtrak is seeking.

These include a CSX promise to give priority to Amtrak trains when dispatching; a CSX agreement to cooperate with potential service expansions on the former Boston & Albany line between Worcester, Massachusetts, and Albany, New York; upgrading the current Downeaster route in Maine with positive train control and allowing expanded service; and allowing operation of the new Berkshire Flyer to Pittsfield, Massachusetts.

The Flyer would use the B&A route, which also hosts the Boston section of Amtrak’s Lake Shore Limited, as part of its trek between Pittsfield and New York City on weekends.

A 1,000-foot siding will be constructed in Pittsfield.  Planning for the Berkshire Flyer has been underway for years but been stymied by lack of an agreement between Amtrak and CSX.

Trains magazine reported that the Flyer could operate as a special service pending construction of the Pittsfield siding.

The Trains report also said CSX agreed to ensure that Norfolk Southern intermodal and automotive trains using the B&A route would not interfere with proposed or existing Amtrak service.

NS trains now use Pan Am Southern tracks between Mechanicville, New York, and Ayer, Massachusetts, but would shift to the B&A after the merger is completed.

In recent weeks CSX has reached agreement with other railroad systems that had initially opposed or raised concerns about the merger.

However, two carriers, the Massachusetts Department of Transportation/Massachusetts Bay Transportation Authority and Canadian Pacific, still have concerns about the merger that have yet to be addressed.

STB CSX-Pan Am Merger Hearings to be Online

January 8, 2022

The U.S. Surface Transportation Board this week said that public hearings regarding CSX plans to acquire Pan Am Systems will be conducted online.

The hearings will be conducted via Zoom and will begin at 9:30 a.m. on Jan. 13. Additional time has been allotted on Jan. 14 to accommodate all speakers, the STB said in a news release.

CSX wants to acquire the 1,200-mile Pan Am system, thus extending the Class 1 carrier’s network into areas of Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.

CP-KCS Deal to Close Today, STB Sets Hearing for CSX-Pan Merger

December 14, 2021

Canadian Pacific is expected to assume ownership of Kansas City Southern today (Dec. 14, 2021).

The $31 billion acquisition was approved by shareholders of both companies last year, but a merger of the two companies is pending review by the U.S. Surface Transportation Board.

KCS will continue to operate as an independent company during the review period and be placed in a blind trust until the STB rules in what is expected to be the fourth quarter of 2022.

During this period, management of KCS is expected to remain the same.

In an unrelated development involving Class 1 railroad mergers, the STB has set hearing dates of Jan. 13-14, 2022, for the proposed merger of CSX and New England regional railroad Pan Am Railways.

The hearing will be held online on Jan. 13 with time reserved for the following day if needed.

Those wishing to address the Board must file a notice of intent to participate by Dec. 20.
The STB also said last week that it will not require an environmental and historic review in the CSX acquisition of Pan Am.

KCS Stockholders OK Merger With CP

December 10, 2021

Stockholders of Kansas City Southern voted overwhelmingly on Friday in favor of a merger with Canadian Pacific.

KCS said the merger won approval of 99.6 percent of the votes cast. Earlier in the week CP shareholders approved the merger by a similar tally.

CP has proposed acquiring KCS in a stock and cash transaction by which KCS common share holders will receive $90 in cash and 2.844 CP shares for each KCS share held.

KCS preferred shareholders will receive $37.50 in cash. The deal is expected to close on Dec. 14 at which time KCS will be placed in a voting trust while the U.S. Surface Transportation Board reviews the proposed merger.

If the merger wins regulatory approval, the surviving company will be known as Canadian Pacific Kansas City.

The STB is expected to rule on the merger by the fourth quarter of 2022. The merger earlier received approval of regulators in Mexico.

CP Shareholders OK Merger with KCS

December 8, 2021

Shareholders of Canadian Pacific today approved a merger with Kansas City Southern. KCS shareholders will vote on the merger on Friday.

The vast majority of CP stockholders approved the $31 billion deal, which involves CP buying KCS and putting it in a blind trust while U.S. regulators consider the merger.

Terms of the deal include CP issuing 277 million shares of CP common stock to KCS common stock holders.

Review of the merger by the U.S. Surface Transportation Board is expected to take much of 2022.

If the merger is approved the surviving company will operate as Canadian Pacific Kansas City.

Mexico Approves CP-KCS Merger

November 27, 2021

The Mexican Federal Economic Competition Commission on Friday approved a proposed merger of Canadian Pacific and Kansas City Southern.

Mexican approval was needed because KCS has rail lines in that country.

The merger, which involves CP buying KCS, must still be reviewed by the U.S. Surface Transportation Board, a process that is expected to take about year.

At present CP and KCS continue to operate as independent entities, but if shareholders of both companies approve the deal later this month CP plans to place KCS into a blind trust owned by CP.

STB Accepts CP-KCS Merger Application

November 24, 2021

The merger application filed by Canadian Pacific and Kansas City Southern has been accepted by the U.S. Surface Transportation Board.

Regulators are expected to take up to a year to review the merger bid, which the carriers formally sought in October.

The STB thus turned aside objections by Union Pacific and Canadian National that the CP-KCS merger application was incomplete (UP) or filed too soon (CN)

 “The Board finds that the Application is complete as it contains all information required by the Board’s regulations. Accordingly, the Application is accepted,” the board wrote in accepting the CP-KCS application.