CN Closes Transaction to Acquire Rail and Marine Holdings of Great Lakes Transportation

MONTREAL – Canadian National on May 10 completed its acquisition of the rail and marine holdings of Great Lakes Transportation LLC (GLT).

CN will now commence the step-by-step integration of two railroads and a rail switching company into its 17,500-mile North American system. The railroads are:

  • The 212-mile Duluth, Missabe and Iron Range Railway Company (DM&IR) – the Class II railroad is a common carrier of pelletized iron ore in Minnesota and Wisconsin.
  • The Class II Bessemer and Lake Erie Railroad Company (B&LE), which carries primarily coal, iron ore and limestone between the Lake Erie port of Conneaut, Ohio, and steel mills in the Pittsburgh area.
  • The Pittsburgh & Conneaut Dock Company (P&C Dock) – a Class III switching railroad that performs ship-to-rail and rail-to-ship bulk transfer operations for the B&LE at three docks at Conneaut.

As part of the transaction, CN has also acquired Great Lakes Fleet, Inc. – a non-railroad company with eight Great Lakes vessels transporting bulk commodities, principally for the United States steel industry. Under a demise charter and vessel management agreement, Keystone Shipping Co. of Bala Cynwyd, Pa., will operate the ships.

CN announced October 20, 2003, an agreement with GLT – a company controlled by The Blackstone Group – to purchase GLT’s assets for US$380 million subject to regulatory approvals. All of the requisite approvals have now been obtained.

“Our acquisition of the GLT carriers is good for our network and good for our customers,” said E. Hunter Harrison, president and chief executive officer of CN. “CN will enjoy new efficiencies in network performance, and become a major player in the bulk commodities stream for the United States steel industry.

“Western Canadian shippers will benefit from improved traffic flows in our NAFTA corridor between Winnipeg and Chicago,” Harrison added. “At the same time, the mining community in the Mesabi Range will have access to CN, a railroad with the financial wherewithal to invest in freight cars, locomotives, dock facilities and capital works that underpin a crucial supply chain for the steel industry.”

The acquisition of the DM&IR gives CN ownership of a key 17-mile segment of track in the Duluth, Minn./Superior, Wis., area, as well as a rail line parallel to its own line in the 64-mile rail corridor north of the two cities. This will improve CN’s train dispatching in Duluth/Superior region and enable the company to avoid capital expenses it would otherwise incur for improvements to its existing line in the rail corridor, officials said.