WASHINGTON — The Surface Transportation Board approved Canadian Pacific Railway Limited’s plan to buy the Dakota, Minnesota & Eastern Railroad Corporation and its subsidiaries: Iowa, Chicago & Eastern Railroad and Cedar American Rail Holdings.
The official effective date of the final decision is Oct. 30.
“The DM&E is an excellent fit for Canadian Pacific making this a strategic end-to-end addition to our network,” said Fred Green, President and Chief Executive Officer of CP. “This is also a positive development for CP, DM&E and IC&E customers. CP customers will have direct single line access to the Midwest US markets and the Kansas City gateway, which will improve fluidity to and from the Southwest US and Mexico. DM&E and IC&E customers will have access to single line haul opportunities to new markets and access to CP’s car fleets.”
In reaching its decision, the STB found that “no shipper will lose the option of competitive rail services” as a direct result of the transaction. Also, the transaction will not result in “either a substantial lessening of competition, the creation of a monopoly, or a restraint of trade in freight surface transportation” in any region of the U.S. and any “minor, geographical competitive effects” that the transition may bring about “are outweighed by its public-interest benefits.”
The STB said that Canadian Pacific may not transport any coal originating on the new Powder River Basin line “until the agency has prepared an Environmental Impact Statement addressing the environmental impacts of those movements and issued a final decision allowing such operations to begin.”
The DM&E is the largest regional railroad in the U.S. and the only Class II railroad that connects and interchanges traffic with all seven Class I railroads, connecting with Canadian Pacific at Minneapolis, Winona, Minn., and Chicago. The DM&E is expected to deliver double digit top-line revenue growth and EBITDA in 2008.
It is headquartered in Sioux Falls, SD and has approximately 1,100 employees, 2,500 miles of track, including approximately 500 miles of trackage rights, and rolling stock that includes 7,200 rail cars and 150 locomotives. The DM&E serves eight states: Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota, Wisconsin and Wyoming with access to Chicago, Minneapolis/St. Paul, Kansas City and key ports.
“While this is a day to celebrate, it is also very important that the qualities that have made the DM&E, IC&E and Cedar American so successful stay as vibrant as they were before the acquisition,” Green added. “I look forward to building and strengthening our company, together.”
Meanwhile, Canadian National’s proposed purchase of the Elgin, Joliet & Eastern Railway Co. is held up in an environmental review.
— Railfanning.org News Wire