Norfolk Southern Corporation acquired Conrail Inc. (Consolidated Rail Corporation) for Approximately $5.9 billion (NS's 58% economic interest; ~$5.74 billion cash invested in 1997, carried at $5,888 million at year-end 1997) out of the roughly $10 billion joint acquisition by NS and CSX, a transaction completed in June 1999, structured as cash tender offer through a jointly owned acquisition entity; 58% economic and 50% voting interest to NS, remainder to CSX.
Conrail Inc. (Consolidated Rail Corporation) operates in Class I freight rail / Northeast route network, is based in Northeastern United States (approximately 10,800 route-miles at acquisition). Norfolk Southern and CSX Corporation agreed on April 8, 1997 to jointly acquire Conrail Inc., the holding company for Consolidated Rail Corporation, then the dominant freight railroad in the Northeast operating roughly 10,800 route-miles. On May 23, 1997 the two companies completed a joint tender offer for Conrail's outstanding stock and placed the shares in a voting trust pending regulatory review; Conrail was merged with an acquisition vehicle (Green Merger Corp.) into Green Acquisition Corp., an entity jointly owned by NS and CSX. The Surface Transportation Board approved the control application in 1998 (written decision effective August 22, 1998), and NS and CSX began operating their respective allocated portions of Conrail's system on the agreed Closing Date of June 1, 1999. NS took a 58% economic and 50% voting interest and operated the routes and assets allocated to Conrail's Pennsylvania Lines LLC subsidiary.
Implementation of the Conrail transaction expanded NS's service area considerably, adding roughly 7,200 route-miles and giving NS access to most major East Coast ports, to New York City and the Northeast, and to markets it did not previously reach directly.
Conrail was the only large-scale route into the Northeast, New York City and the East Coast ports; splitting it with CSX gave NS a competitive northeastern network without a single railroad monopolizing the region. Single-line service into the Northeast and to East Coast ports; extension of NS's competitive reach across territory previously served only by Conrail. Routes and assets allocated to Conrail's Pennsylvania Lines LLC subsidiary, leased to and operated by Norfolk Southern Railway
NS and CSX, through a jointly owned entity, completed the acquisition of tendered Conrail stock which they placed in a voting trust pending the issuance and effectiveness of the Surface Transportation Board's written decision approving their joint application to control Conrail. NS has a 58% economic and 50% voting interest in the jointly owned entity, and CSX has the remainder.Norfolk Southern Corporation, FY1998 Form 10-K405, Note 2 (Joint Acquisition of Conrail)
Advisory firms were not disclosed for this transaction.