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Rail News Home M&A

5/10/2004



Rail News: M&A

CN takes ownership of Great Lakes Transportation's short lines, shipping company



Today, Canadian National Railway Co. announced it completed a $380 million deal with Great Lakes Transportation L.L.C. under which the Class I acquires three short lines and shipping firm Great Lakes Fleet Inc. In October, the companies reached a purchase agreement; last month, the Surface Transportation Board conditionally approved CN's acquisition of the three railroads.

CN plans to integrate the 355-mile Bessemer and Lake Erie Railroad Co., 212-mile Duluth, Missabe and Iron Range Railway Co. (DM&IR), and switching road The Pittsburgh & Conneaut Dock Co. into its 17,500-mile North American system.

Under a vessel-management agreement, Keystone Shipping Co. will operate Great Lakes' eight ships for CN. The vessels transport bulk commodities — primarily for the U.S. steel industry — across the Great Lakes.

The acquisition will enable CN to obtain "new efficiencies in network performance and become a major player in the bulk commodities stream for the United States steel industry," said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement. "Western Canadian shippers will benefit from improved traffic flows in our NAFTA corridor between Winnipeg and Chicago."

By acquiring DM&IR, CN obtains ownership of a 17-mile line in the Duluth, Minn./Superior, Wis., area, and a parallel line north of the two cities that will enable the Class I to improve the region's train dispatching and eliminate the cost of improving its own line in the corridor.


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