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Rail News: M&A

BNSF to buy 368-mile line from South Dakota

On Friday, BNSF Railway Co. announced it reached a settlement with South Dakota that will enable the Class I to purchase a 368-mile state-owned rail line between Aberdeen and Sioux City for $41.6 million. The sales agreement — which resolves ownership and service issues that led to two pending lawsuits — is subject to Surface Transportation Board approval.

Per state officials’ request, BNSF agreed to allow regionals and short lines in the state to use the line to provide agricultural product shippers access to additional markets.

In 1980, the state purchased the line from the Milwaukee Road. A year later, South Dakota and BNSF entered into an agreement under which the railroad would provide service to shippers along the line on behalf of the state for five years. In 1986, BNSF agreed to continue operating the line and the state agreed to sell the line to the Class I.

“The purchase of the line will mark the next step in our successful partnership with the state and rail shippers over the last two decades to revitalize and upgrade these once-abandoned rail lines,” said Peter Rickershauser, BNSF vice president of network development, in a prepared statement.

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More News from 5/2/2005