CSX acquires regional rail network
Reported $700M Pan Am purchase needs regulatory approval
CSX Corp. said Monday it had signed an agreement to acquire Pan Am Railways, the nation’s largest regional railroad with tracks extending from the Capital Region east through much of New England.
While details of the acquisition weren’t revealed, Trains magazine reported that the purchase price was believed to be $700 million.
Pan Am, based in North Billerica, Mass., is privately held. Timothy Mellon is chairman and majority owner. It operates a 1,200-mile rail network throughout New England and has a joint venture with Norfolk Southern operating another 600 miles of track in what’s called the Patriot
Corridor between Mechanicville and Ayer, Mass.
CSX would acquire Pan Am’s share, putting it in a joint venture with its rival, Norfolk Southern.
“In Pan Am, CSX gains a strong regional rail network in one of the most densely populated markets in the U.S., creating new efficiencies and market opportunities for customers as we continue to grow,” said James M. Foote, CSX president and CEO. “We intend to bring CSX’S customer-centric focus and industry-leading operating model to shippers and industries served by Pan Am.
“We look forward to integrating Pan Am into CSX, with substantial benefits to the railserved industries of the Northeast, and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New
England and beyond,” Foote added.
“Pan Am is pleased to reach this agreement with CSX, a North American leader in railbased freight transportation,” said David A. Fink, Pan Am’s president. “This is great news for New England shippers and the national freight network overall.”
There was no mention of the potential impact on jobs that the acquisition might have.
And the acquisition still needs regulatory approval from the Surface Transportation Board.
Norfolk Southern gained access to New England markets through its 2009 joint venture with Pan Am, operating an east-west rail line between Mechanicville and Ayer in direct competition with the former Boston & Albany line operated by CSX.
The Mechanicville rail yard has been the site of a “filet and toupee” operation that would remove the top container on Massachusetts-bound doublestack container trains to allow the trains to fit through the Hoosac Tunnel in the Berk
shires.
Westbound, containers would be double-stacked after clearing the tunnel.
Norfolk Southern’s tracks extend westward from there to Chicago and to the Southeast.
Norfolk Southern didn’t immediately respond to a request from the Times Union for comment. Earlier, it provided this statement to Trains magazine:
“In 2009 Pan Am Railways and Norfolk Southern negotiated a pro-competitive joint venture that resulted in the creation of Pan Am Southern,” NS said in a statement. “That transaction was approved by the Surface Transportation Board in large part because the joint
venture provided competition in the marketplace. Over the last decade, Norfolk Southern has ensured the success of that venture, and remains committed to it today. We now understand that CSX is poised to acquire Pan Am Railways. We are carefully considering the effects of this transaction, especially any competitive harm to the marketplace. We remain committed to working with any potential Pan Am Railways purchaser, the STB, and any other applicable regulatory agencies to protect shippers, commuters and rail passengers throughout the New England market.”