Norfolk Southern Corporation acquires Meridian Speedway LLC (Meridian, MS - Shreveport, LA rail line)

Norfolk Southern Corporation acquired Meridian Speedway LLC (Meridian, MS - Shreveport, LA rail line) for $300 million cash contributed for a 30% equity interest, a transaction completed in May 2006, structured as NS contributed $300 million cash for a 30% interest; Kansas City Southern contributed the rail-line assets for a 70% interest. The deal was a Joint venture (30% equity interest).

Meridian Speedway LLC (Meridian, MS - Shreveport, LA rail line) operates in Class I freight rail / shared corridor (Meridian Speedway), is based in Meridian, Mississippi to Shreveport, Louisiana (portion of the Dallas-Meridian corridor). Norfolk Southern, through its subsidiary The Alabama Great Southern Railroad Company, formed a joint venture with Kansas City Southern to own and improve the rail line between Meridian, Mississippi and Shreveport, Louisiana — the 'Meridian Speedway,' part of the Dallas-to-Meridian corridor. Under the transaction agreement dated December 1, 2005 (completed May 1, 2006), NS contributed $300 million in cash for a 30% equity interest while KCS contributed the line's assets for a 70% interest. NS's investment was earmarked for capacity-expanding capital improvements, capital maintenance, and reimbursement of certain prior KCS capital spending on the line. The JV is governed by a management committee of KCS and NS representatives.

Co-investing in the Meridian Speedway gave NS a stake in and influence over a strategic east-west corridor connecting its southeastern network with KCS's routes toward Texas and Mexico, funding capacity improvements without acquiring the whole line.

The Meridian Speedway is a critical east-west freight artery; a minority stake plus capital funding let NS improve throughput on a corridor it relies on without buying the entire line. Expanded capacity and improved fluidity on the Southeast-to-Texas/Mexico intermodal corridor. Meridian Speedway LLC joint venture, managed by a KCS/NS management committee

Advisory firms were not disclosed for this transaction.