Update: CSX Looking to Acquire Pan Am Railways

Three Pan Am Railways GP40-2 locomotives lead a train near Auburn, Maine, on March 27, 2019. Photo by George Melvin. 

Update: CSX Looking to Acquire Pan Am Railways

By Justin Franz 

Updated: Monday, Nov. 9, 3:45 p.m. EST

WASHINGTON — CSX Transportation is looking to acquire Pan Am Railways, according to a document filed with the U.S. Surface Transportation Board on Nov. 6

While CSX and Pan Am have not filed any formal documents about a possible takeover with the STB, Norfolk Southern preemptively filed an objection with the government agency on Friday. That latter was made public on Monday when news first broke of a potential transaction. In a statement to Railfan & Railroad, CSX officials confirmed it was looking to make a deal with Pan Am.

“CSX has been in discussions with Pan Am Railways, Inc. regarding a possible transaction,” said spokesperson Sheriee Bowman. “As part of this effort, CSX has engaged directly with NS to understand any issues they might have.”

NS has a joint venture with the New England regional called Pan Am Southern that includes more than 400 miles of track in Massachusetts, New York and Connecticut. The venture dates back to 2009 and allows NS to go head-to-head with CSX in the Boston market.

 “NS is concerned with CSX’s potential acquisition of Pan Am, specifically its interest in PAS, and is further concerned with CSX’s potential use of a voting trust to acquire Pan Am,” an attorney for NS wrote. “One of the main benefits of NS’ and Pan Am’s joint control and ownership of PAS was to strengthen competition with CSX… Any CSX effort to acquire Pan Am would threaten to materially undermine this existing competition, thus impacting not only NS but also rail shippers and other railroads.”

The letter also notes that NS was “given certain rights in the event of a ‘change of control,’” including the establishment of a voting trust. 

In June, Pan Am reportedly approached the Bank of Montreal to assist with a potential sale and rumors swirled that a change in ownership was imminent. NS, Canadian National and Canadian Pacific were all considered potential suitors for the regional railroad that operates on 1,700 miles of track in New England and New York. A few weeks after word broke that Pan Am was looking for a buyer, NS executives declined to comment on the potential sale, only saying that the railroad was “committed” to the New England market. CP President and CEO Keith Creel said his railroad was “focused on” on its recently acquired Central Maine & Quebec and that it was unlikely the Class One would be going after any other acquisitions in the immediate future.

This article was posted on: November 9, 2020