CANADIAN National revealed on January 30 that it had reached agreement to buy the North American operations of Wisconsin Central Transportation Corp for US$1·2bn. CN will acquire WCTC’s common stock for US$17·15 per share, and take over approximately US$400m of debt.
The deal will give CN control of WC’s Chicago - Superior main line, which forms a key link between the north-south Illinois Central and the transcontinental route to western Canada. WC already hauls CN traffic under a 20-year agreement signed in 1998. WC operates 4585 route-km in Wisconsin, Illinois, Minnesota, Michigan and Ontario.
CN’s President & CEO Paul Tellier hopes that the sale will be treated as a ’minor transaction’ by the US Surface Transportation Board, whose 15-month moratorium on consideration of Class I merger applications ends in June; this could see approval by September.
WCTC President & CEO Thomas F Power Jr described the deal as ’the best transaction for our shippers, stockholders and employees’. He confirmed that WCTC had approached CN first, suggesting that ’CN is a natural fit’ offering ’the best long-term prospects’, which will ’protect the integrity of Wisconsin Central’s rail network.’
The deal does not include WCTC’s overseas interests, which include a 24% stake in New Zealand’s Tranz Rail, 42·5% of English Welsh & Scottish Railway, and 33% of Australian Transport Networks in Tasmania. CN ’expects WCTC to carry out its commitment to sell its minority equity investments in overseas rail ventures as soon as possible.’
- This month is due to see final bids for the Tranz Scenic passenger business. Five firms were shortlisted in January, including Victoria’s West Coast Railway and Transdev of France. n