Norfolk Southern Railway Company signed a USD 1.62 billion agreement to acquire all of the assets of Cincinnati Southern Railway (CSR), a 542 km rail that runs from Cincinnati, Ohio to Chattanooga, Tennessee. The transaction is expected to be completed in the first half of 2024.
Closing of the sale is subject to approval by the voters of the City of Cincinnati, regulatory clearance from the U.S. Surface Transportation Board and passage of state law changes enabling the establishment of a trust.
The CSR is currently owned by the City of Cincinnati and operated by the Cincinnati, New Orleans and Texas Pacific Railway Company (CNOTP), a wholly owned subsidiary of Norfolk Southern Railway, under a lease agreement expiring in 2026.
“The Cincinnati Southern Railway is a critical artery linking the Midwest and the Southeast and plays an important role in our powerful network that serves more than half the U.S. population. This agreement sets the framework for Norfolk Southern to own a core line in our network,” said Norfolk Southern President and Chief Executive Officer Alan H. Shaw said.
Norfolk Southern intends to finance the transaction through a combination of internal and external sources. The City of Cincinnati plans to use the proceeds of the transaction to form an infrastructure fund that will benefit the citizens of Cincinnati. The fund will be used for the rehabilitation or modernisation of existing infrastructure, such as roads, bridges, municipal buildings, parks, recreation facilities and other infrastructure necessary for delivering core public services.
“This is an historic opportunity to deliver great value to the citizens of Cincinnati and realize a substantial return on the investment and foresight of our predecessors,” the Mayor of Cincinnati City Aftab Pureval said.
The agreement provides the company ownership of approximately 9,500 acres (3,844 ha) of land that sits under infrastructure maintained and operated by Norfolk Southern. Further, it ensures Norfolk Southern will own the line in perpetuity, while eliminating uncertainty around future lease costs. The line is one of the highest density segments of the company’s network, with as many as 30 trains a day traveling the route.
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