Norfolk Southern, through its Norfolk Southern Railway unit, has agreed to take over substantially all of the assets of Cincinnati Southern Railway (CSR) for around $1.62bn in cash.
CSR comprises almost 337 miles of railroad stretching from Cincinnati in Ohio to Chattanooga in Tennessee, US.
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At present, the CSR is owned by the City of Cincinnati. As part of a lease agreement expiring in 2026, it is operated by Norfolk Southern Railway’s wholly-owned unit Cincinnati, New Orleans, and Texas Pacific Railway Company (CNOTP).
The deal offers Norfolk Southern ownership of around 9,500 acres of land, enabling the railroad operator to own the line in perpetuity and avoid uncertainty tied to expenses on future lease.
Norfolk Southern president and CEO Alan Shaw said: “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 US population.
“This 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.”
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By GlobalDataThe operator will fund the deal using a mix of internal and external sources.
The City of Cincinnati intends to use the deal proceeds to create an infrastructure fund to benefit the citizens of Cincinnati.
Completion of the deal, which awaits the nod of Cincinnati voters and the US Surface Transportation Board, is expected in the first half of 2024.
This year in March, Norfolk Southern awarded a contract to Wabtec for the modernisation of its 330 locomotives.
