A FORMAL agreement to divide Conrail between Norfolk Southern and CSX was unveiled on April 8. The two companies will drop litigation against each other and form a jointly-owned entity to buy the remaining Conrail shares for $115 each in cash. NS will take a 58% stake for $5·9bn and CSX 42% for $4·3 bn. The companies plan to file a joint application in June for Surface Transportation Board approval, and hope to complete the transaction by spring 1998.
To create ’balanced competition’, CSX and NS will split Conrail’s X-shaped trunk lines, and take two legs each (map). CSX will get the route from Boston through Cleveland to St Louis, with links to Montréal, New York and Philadelphia. Norfolk Southern will take over the route linking Chicago, Cleveland, Pittsburgh and northern New Jersey plus the line from New Jersey to Buffalo, and connections to the New York City area. The two will share lines around Detroit, Philadelphia, Indianapolis and the Monongahela coalfields.
Conrail’s January 1996 plan to sell off branches in Michigan, Massachusetts, New York, Pennsylvania, Illinois, Indiana and Ohio has been cancelled, and negotiations with a buyer for lines in New Jersey have been suspended indefinitely. o
