CSX Acquisition of Pan Am Railways

That's for sure!

Oh oh. Is that good or bad news? I'll start melting the butter.

I've heard the same.

Luckily everyone has had the popcorn ready for months.

Mine's a bit stale at this point. And I think I need something stronger.

I always preferred kettlecorn, but "Pan Am" branded popcorn will do fine.

STB decision of 2/25/21 to stand firm re: what should be a less complicated rail line transaction than CSX acquiring PAR, ie, the proposed CN acquisition of Massena lines from CSX, might have bearing on any anti-competitive concerns that STB sees re: Pan Am's anticipated sale to CSX.

It's been almost a year since STB approved CSX sale of the "Massena Lines" to CN with conditions that Purchase & Sale Agreement language preventing future competitive access to CN around Syracuse by FGLK and NYSW, so called section 5.14(b), be eliminated or modified. Here's the PSA language of 5.14(b):

The Parties agree that [CSXT] will not grant to Buyer, and Buyer will not seek, directly or indirectly, before or after Closing, through the transactions contemplated by this Agreement or other means, access to the New York, Susquehanna and Western Railway (“NYSW”) or the Finger Lakes Railway Corporation (“FGLK”) or any successor or assign of NYSW or FGLK. In the event such access is acquired or required to be afforded prior to, or as a condition of Closing, either Party shall have the right to terminate the Transaction pursuant to Section 11.02 hereof. Buyer shall be entitled to the limited use of certain trackage as described in the Operative Documents for the purpose of effectuating interchange, with [CSXT] only, at each of Belle Isle and in Dewitt Yard provided that such interchange shall not be used for the purpose of achieving access to NYSW or FGLK. This Section 5.14(b) shall survive Closing.

CN and CSX negotiated and were unable to come to terms on this issue and the parties went back to STB formally asking STB to reconsider its position re: what it saw as anti-competitive language. STB did examine the acquisition proposal again and decided that its original decison was approrpiate re: the need for CSX & CN to alter the anti-competitive nature of the section 5.14(b) language:

Conclusion. After carefully considering the potential anticompetitive effects of the Transaction and the public benefits of the Transaction, the Board properly authorized the Transaction, conditioned on B&LE and CSXT removing or modifying section 5.14(b). Neither B&LE nor CSXT has presented evidence showing that the Board materially erred in imposing a condition designed to alleviate or eliminate the competitive harm of section 5.14(b) or that reconsideration is warranted due to new evidence or changed circumstances.19 For these reasons, B&LE’s and CSXT’s petitions for reconsideration will be denied.

It is ordered:
1. B&LE’s petition for reconsideration is denied.
2. CSXT’s petition for reconsideration is denied.
3. SMART/TD-NY’s request to revise the employee protection in Decision No. 4 is denied as moot.
4. This decision will be effective on its date of service.

I don't believe the acquisition is necessarily dead but CN and CSX will likely have to decide if the deal can go forward.

Link to the STB decision of 2/25/21:
https://dcms-external.s3.amazonaws.com/ ... /50373.pdf

If the shoe drops today I hope that it's later in the afternoon so I can have beer with my popcorn. It might be too much excitement for me.

Keolis and Pan Am have copies already and I am told there are quite a few curveballs. They think it will come out late today or Monday.

CSX is very accommodating/giving up a lot including their half of PAS. To whom will soon be revealed!

Just for quick reference, anyone?

Keolis is the operator of MBTA rail services.

If such be the case, all they do is drive the trains and collect the fares.

I would think the REAL party in interest would be the "T" themselves. They would have concerns regarding how much additional freight traffic Chessie expects to handle over the FRA Class 4 trackage, albeit owned by the Boston and Maine, but which they pay to have maintained to handle passenger trains.

You'd think that NNEPRA would also have like concerns.

Why are you assuming no one else is in possession of the document? These are just the two I have contacts at and know of.

However, your characterization of Keolis is incorrect. Their function is much more than that including maintaining the relationships / operating agreements with the freight railroads. They also are the employees setting up shop in that new dispatching center at Iron Horse Park. Hence why this is relevant.

I truly hope that NS wants to stay in the game in NE and takes full control of PAS. Hopefully some of their leadership sees a future here and doesn't give up on all that they have invested in the patriot corridor over the years. Two class I RR's serving NE is a win win situation here with both having the resources to bring the infrastructure up to a good state of repair.

That is not happening.

https://trn.trains.com/news/news-wire/2 ... regulators It's in! Not posted to the STB site yet though.

Shortline614 wrote: ↑Fri Feb 26, 2021 12:14 pm https://trn.trains.com/news/news-wire/2 ... regulators It's in! Not posted to the STB site yet though.

The key paragraph from that link:

"Genesee & Wyoming will operate and maintain Pan Am Southern under a new subsidiary, Berkshire & Eastern. The move is a victory for NS, which had sought a neutral operator for Pan Am Southern. CSX and NS will jointly own the Pan Am Southern, with NS retaining its 50% share and CSX acquiring Pan Am Railways’ half of the joint venture."

NS also gets trackage rights over the B&A for 22K and 23K, meaning they can cut travel times by 3 hours and run double-stack trains now.