CSX expands in New England with acquisition of Pan Am Railways
Purchase includes 121 miles of track in New Hampshire
Terms of the deal were not disclosed, but since Pan Am put itself on the block earlier this year, industry analysts estimated the asking price at about $700 million.
Earlier this month, when CSXT revealed talks had begun with Pan Am, Norfolk Southern Railway informed the Surface Transportation Board – the federal agency that regulates railroads – that it would oppose the acquisition, claiming it would cramp competition with adverse effects on other railroads and commercial shippers in New England. At the same time, CSXT issued a statement that it had also “engaged directly with Norfolk Southern to understand any issues they might have.”
Pan Am and Norfolk Southern are partners in a $140 million joint venture known as Pan Am Southern, which gives Norfolk Southern access to New England by way of trackage rights on the 437 miles of the “Patriot Corridor” between Mechanicsville, N.Y., and Ayer, Mass. In acquiring Pan Am, CSXT would also gain a 50% stake in Norfolk Southern’s route into New England.
The trade journal Railway Age reported that Norfolk Southern issued a statement that said it is “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 (Surface Transportation Board), and any other applicable regulatory agencies to protect shippers, commuters and rail passengers throughout the New England market.”
The Surface Transportation Board must approve the transaction.
‘Strong regional rail market’
CSX, headquartered in Jacksonville, Fla., owns and operates a rail network of some 21,000 miles of track in 23 states. By acquiring Pan Am, CSXT would expand its presence in New York, Connecticut and Massachusetts and extend its reach to Vermont, New Hampshire and Maine.
“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 CEO of CSX in a statement.
In New Hampshire, Pan Am owns or operates five railway lines. The Pan Am Railways Main Line runs 35 miles between Plaistow and Rollinsford, carrying the Amtrak Downeaster between Boston and Portland, with stops in Exeter, Durham and Dover. The New Hampshire Main Line stretches more than 40 miles from Nashua to Concord and carries three-quarters of all freight (by weight) reaching the state by rail. Perhaps most significantly, the main line runs within the Capitol Corridor, the preferred route for extending passenger rail service from greater Boston to Nashua, Manchester and perhaps Concord.
The 12-mile Hillsboro Branch connects Nashua to Wilton, where the state-owned line, operated by the Milford-Bennington Railroad, extends the service 18 miles to Bennington. On the Seacoast, Pan Am owns and operates the 10 miles of track between Portsmouth and Newfields and another 3.5 miles of track between Portsmouth and Newington. The company has indicated it intends to abandon the Hampton Branch, which runs 10 miles between Portsmouth and Hampton.