CSX announces plans to acquire Pan Am Railways’ New England operations

Jacksonville, Fla.-based Class I railroad CSX said this week that it has inked a definitive agreement to acquire North Billerica, Mass.-based short-line railroad carrier Pan Am Railways Inc.

Financial terms of the acquisition were not disclosed, and the transaction is subject to regulatory review and approval by the Surface Transportation Board, CSX officials said. Media reports pegged the sale price at $700 million.

They added that Pan Am owns and operates a highly integrated, nearly 1,200-mile rail network and has a partial interest in the more than 600-mile Pan Am Southern system. Its network across New England has access to multiple ports and large-scale commodity producers.

As for what this acquisition brings to CSX, the company said with adding Pan will expand its reach in Connecticut, New York and Massachusetts while adding Vermont, New Hampshire and Maine to its existing 23-state network. What’s more, CSX added that it will provide various benefits to shippers and local communities, as it integrates Pan Am into its best-in-class network.

“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, President and chief executive officer of CSX, in a statement. “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 rail-served industries of the Northeast, and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.”

And David A. Fink, President of Pan Am Railways said in the same statement that: “Pan Am is pleased to reach this agreement with CSX, a North American leader in rail-based freight transportation. This is great news for New England shippers and the national freight network overall.”

Class I railroad carrier Norfolk Southern issued a statement on this news 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. “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.”