OMAHA, Neb. (AP) — Norfolk Southern plans to buy a regional railroad that already operates out of Cincinnati for $1.62 billion.
The deal, announced Monday, will give Norfolk Southern ownership of the busy 337-mile (542-kilometer) Cincinnati Southern Railway, which connects the Ohio city to Chattanooga, Tennessee. A subsidiary of Norfolk Southern now leases the railroad and runs up to 30 trains a day on it.
“Cincinnati Southern Railway is a critical artery connecting the Midwest and Southeast and plays an important role in our robust network,” said Norfolk Southern CEO Alan Shaw.
As part of the deal, the railroad will acquire 9,500 acres (3,800 hectares) of land under the tracks and remove any uncertainty about how much it will have to pay in future leases. The US Surface Transportation Board will review the deal, which must also be approved by Cincinnati voters.
Norfolk Southern is one of the nation’s largest railroads and reported a profit of nearly $1 billion in the third quarter. It operates approximately 19,500 miles (31,382 kilometers) of tracks in 22 eastern states and the District of Columbia. The Atlanta-based railroad said it plans to use both cash and borrow money to finance the deal.
Cincinnati officials plan to use the proceeds from the sale to create an infrastructure trust fund that will be invested and generate money for future projects in the city.
Mayor Aftab Purewal said the sale would allow the city to “get a significant return on the investment and foresight of our predecessors.”
