Chances of CSX being bought out by UP or BNSF?

what are the chances that csx could be bought out,or took over by,lets say union pacific,bnsf.

Seems like every few months I hear a "rumor" that CSX is about to be bought out by UP or BSNF. If railroad history teaches us anything, it's that railroads split, merge, get bought up, or go bankrupt. So, what are the chances?? Pretty darn good! Now, it's a much different atmosphere then when the great robber barons were running things back in the early 1900's. A modern buy out would require the OK by the FTC i believe? Or some federal organization. They may not like the idea of an all powerful coast to coast railroad. Not to mention the stockholders and all that. Rest assured it won't happen overnight. If the Conrail split taught us anything, it took them over a year to hash out the details.

I am going to have to argue the other way here. I really don't see any of the western roads and eastern roads merging any time in the near future, if at all. It seems to me that with the current size of the class 1's they have enough problems to deal with. I think combining any tow of them, with the exception of someone taking KCS, would result in massive problems, which I hope that the government would realize and prevent from happening. Plus the fact that once two of the big ones merged, it would be almost immediate for the other two to go with each other (excluding the canadians here) just to keep up, thus leaving us with two giant railroads, and killing off a good portion of the competition that exists with the five big US ones now. Based on the problems that occurred with the UP-SP-CNW mergers and the Conrail split I really doubt that it would be a rational idea for this to happen. That said it really wouldn't surprise all that much if it did happen, however I would think that at some point the system would just be split back apart again, most likely in the form of regionals being spun off. Just my thoughts.

Any further Class I mergers at this time would only strengthen the hand of those businesses and congress persons demanding re-regulation of freight rates.

People have been saying that UP or CP or BNSF or CN or whoever are going to buy CSX for years. If they say it long enough, it will probally come true.

I think all the EX-Conrail CSX haters should just take all the money they made due to the bidding war before the split and run.

Would the buyout have to be approved by the government? I can't imagine them approving this.

gprimr1 wrote:Would the buyout have to be approved by the government? I can't imagine them approving this.

Depends...Say the UP or BNSF contribute to the right political campaign and there candidate wins this November...That administration might me much more willing to push a merger forward. Know what I mean?

Its called top and bottom or side by side.
These mergers might have been tolerated years ago, had it not been for the great transcon debate.
That said, your chances of seeing CSX or NS being purchased by UP or BNSF are SLIM at best.
Why you say Canada did it. That my friends is a different ball game.
Sure the CN had transcon in the IC takeover, but look at what little the IC was to their railroad.

CSX has been in the site of the UP for almost 20 years that I can think back to. Nothing has ever happened and it won't. You now have a 4 carrier system in the UP/BNSF/NS/CSX and then you have the CP/CN. All other carriers will be subject to purchase/merger, but not the top 4.

I can think of three reasons it won't happen.

First, after some years of instability, there's been a sort of homeostasis within the rail industry. After all the scrambling of who was going to get the odd players out - the D&RGW; the SP; Conrail...now the game is pretty neatly divided four ways. And some of those four players haven't yet learned how to "move their pieces" to best effect.

That's theory. In practice...the CSX physical plant is run-down and getting worse. Any rail company that buys it out, is going to have to make up all that deferred maintenance. This is daunting to the point of working against the merger...if, say, the UP bought CSX, and then had to raise capital to renovate it...the UP itself could become a target for a larger company, a conglomerate or even a takeover specialist. It would be severely weakened.

Besides, with the property so bad...why buy it when odds are you could get it for nothing from Bankruptcy Court in a few years? The government may even PAY someone to take it over, not unlike what is done with failed banks.

Third reason...in this environment, with the short-term future uncertain, most businesses are gong to hunker down and not take risks. Including taking the risk of buying a struggling competitor.

There are other reasons, but those are the biggies.

Here's one more reason why these mergers don't make sense. In today's world, when Union Pacific or BNSF come east, they have two possible connections - CSX and Norfolk Southern. Both companies are going to play nice to improve their chances of landing the most lucrative of this interchange business. If UP buys CSX and BNSF merges with NS, what happens to UP traffic from the west that must interchange in Chicago or St. Louis for final delivery on the old NS. Service goes down and rates go up. The same would happen for each of the Big Four's interchange business. Four is the right number.

Now there are strong rumors around again that the P&W will be operating everything east of CP-45 in Worcester,Ma. within the next 2 to 2&1/2 years.