Norfolk Southern Corporation acquired Cincinnati Southern Railway assets (Cincinnati, OH - Chattanooga, TN, 337 miles) for Approximately $1.62 billion cash consideration to the City of Cincinnati (recorded at approximately $1.7 billion including transaction costs), a transaction completed in March 2024, structured as cash asset purchase; prior operating lease terminated at close; financed through internal and external sources. The deal was a Asset purchase (rail line).
Cincinnati Southern Railway assets (Cincinnati, OH - Chattanooga, TN, 337 miles) operates in Class I freight rail / core-corridor ownership, is based in Cincinnati, Ohio to Chattanooga, Tennessee (Midwest to Southeast). Norfolk Southern's operating subsidiary Norfolk Southern Railway Company, through The Cincinnati, New Orleans and Texas Pacific Railway Company (CNO&TP), agreed to acquire substantially all of the assets of the Cincinnati Southern Railway (CSR) — an approximately 337-mile line running from Cincinnati, Ohio to Chattanooga, Tennessee — under an Asset Purchase and Sale Agreement executed November 17-21, 2022. The line was owned by the City of Cincinnati and had been operated by NS's CNO&TP subsidiary under a lease dating to 1881 (then set to expire in 2026). The purchase gives NS ownership of roughly 9,500 acres of land under infrastructure it already maintained and secures one of the highest-density segments of its network — as many as 30 trains a day — in perpetuity, eliminating future lease-cost uncertainty. The transaction closed on March 15, 2024 for approximately $1.62 billion in cash to the City (about $1.7 billion recorded including costs), after approval by Cincinnati voters (November 2023) and the U.S. Surface Transportation Board. The City established an infrastructure trust fund with the proceeds.
Owning rather than leasing the Cincinnati-Chattanooga line secured a core corridor in perpetuity, removed uncertainty over future control and lease costs, and supported NS's strategy of improving service, enhancing productivity and enabling growth.
One of the highest-density segments of NS's network (up to 30 trains a day) that NS already operated under lease; buying it removed the risk of future lease renegotiation or loss of control. Perpetual control of a core corridor; elimination of future lease expense and control uncertainty. Operated by Norfolk Southern Railway via The Cincinnati, New Orleans and Texas Pacific Railway Company; prior lease terminated at close
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 U.S. 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.Alan H. Shaw, President and Chief Executive Officer, Norfolk Southern
Advisory firms were not disclosed for this transaction.