USA: Norfolk Southern has announced an agreement to acquire the Cincinnati Southern Railway from the City of Cincinnati for $1·62bn, to gain ownership of one of the busiest sections of its network which carries up to 30 trains a day.
The City of Cincinnati says it is the only municipality in the country to own an interstate railway. The 540 km route from Cincinnati in Ohio to Chattanooga in Tennessee was completed in 1880 and leased to the Cincinnati, New Orleans & Texas Pacific Railway Co from 1881. CNO&TP is now a subsidiary of NS, which pays the city $25m/year under a lease agreement which expires in 2026.
The sale agreement ‘sets the framework for Norfolk Southern to own a core line in our network in perpetuity, allowing us to advance our strategic objectives of improving service, enhancing productivity and creating an even stronger platform for accelerated growth, all while eliminating uncertainty around future control of the line and lease costs’, said NS President & CEO Alan H Shaw on November 21.
The acquisition is expected to close in H1 2024, subject to conditions including approval by the voters of Cincinnati and the Surface Transportation Board. It would be financed through a combination of internal and external sources.
‘This is an historic opportunity to deliver great value to citizens of Cincinnati and realise a substantial return on the investment and foresight of our predecessors’, said Mayor Aftab Pureval.
