CSX said Monday it is acquiring Pan Am Railways, but it didn’t disclose terms of the deal. The transaction will expand CSX’s 23-state network into Vermont, New Hampshire and Maine while adding to its reach in New York, Connecticut and Massachusetts.
If regulators approve the deal, CSX would also acquire Pan Am’s partial ownership of a 600-mile joint venture with Norfolk Southern railroad called Pan Am Southern. Earlier this month, Norfolk Southern raised concerns about this deal with the Surface Transportation Board because it said allowing CSX to buy Pan Am could undermine competition between CSX and Norfolk Southern in the eastern United States.
Edward Jones analyst Jeff Windau said he’s not sure how regulators will look at Norfolk Southern’s objections.
“The question will be obviously to see if it is really harming competition or if there are still ways for the industry to compete in those regions,” Windau said.
If the deal is approved, Pan Am, which is based in North Billerica, Massachusetts, would become part of Jacksonville, Florida-based CSX.
“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,” CSX CEO Jim Foote said.
CSX already operates more than 34,000 kilometres of track in 23 Eastern states and two provinces. Norfolk Southern’s network of 19,500 miles of track covers much of the same territory as CSX in 22 Eastern states.