CSX, Conrail to Merge

  • Share
  • Read Later
PHILADELPHIA: CSX Corp. agreed to buy Conrail in a $8.4 billion deal that would form the nation's third-largest freight company. The new company will control some 29,645 miles of track serving most of the eastern U.S. The deal was cut as part of a push by CSX to stay competitive with rivals Burlington Northern and Union Pacific, both of which merged with rail systems in the past two years. Burlington Northern bought Santa Fe in 1995, while Union Pacific merged with Southern Pacific earlier this year. Each control over 30,000 miles of track. The news pushed CSX stock down four percent in early trading on the New York Stock Exchange, but lifted Conrail by 20 percent. The merger will depend on approval from Conrail shareholders, who would receive $92.50 in cash and CSX stock for each share, and the U.S. Surface Transportation Board. After approving two mega-mergers in as many years, the board is unlikely to block this one. Some layoffs are anticipated from the consolidation of the two operations, but neither company would provide any details. Terence Nelan