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Rail News: M&A

CN hammers out mitigation pacts with two more towns


Make it six Chicago-area communities that have reached mitigation agreements with Canadian National Railway Co. regarding its proposed Elgin, Joliet & Eastern Railway Co. (EJ&E) acquisition. During the past few days, the Class I hammered out pacts with Schererville, Ind., and Mundelein, Ill.

CN agreed to help create and maintain quiet zones, and improve train operations, communications and emergency preparedness in the towns.

The agreements are contingent on the Surface Transportation Board’s approval of the EJ&E transaction — something CN hopes will come by year’s end to meet a deadline for its $300 million acquisition deal with U.S. Steel Corp. CN expects to meet all of the board's mitigation requirements through a mitigation program costing $60 million, which is more than 20 percent of the acquisition price and an unprecedented mitigation cost for a rail merger this size, the railroad said.

CN previously reached mitigation agreements with Chicago Heights, Crest Hill and Joliet, Ill., and Dyer, Ind.

“We are receiving a positive response to our mitigation efforts from a growing number of communities, and we are continuing to meet with several other communities on the EJ&E and hope to sign more agreements in the coming days,” said Gordon Trafton, CN senior vice president-Southern Region, in a prepared statement.

Contact Progressive Railroading editorial staff.

More News from 12/12/2008