OHIO – Norfolk southern announced yesterday that they plan to buy a regional railroad it already operates from Cincinnati to Tenn for 1.62 Billion.
The deal announced on Monday will give Norfolk Southern ownership on a busy 337-Mile long Cincinnati Southern Railroad that connects the Ohio city with Chattanooga, Tennessee.
“The Cincinnati Southern Railway is a critical artery linking the Midwest and the Southeast and plays an important role in our powerful network that serves more than half the U.S. population,” said Norfolk Southern President and Chief Executive Officer Alan H. Shaw. “This agreement sets the framework for Norfolk Southern to own a core line in our network in perpetuity, allowing us to advance our strategic objectives of improving service, enhancing productivity, and creating an even stronger platform for accelerated growth, all while eliminating uncertainty around future control of the line and lease costs.”
Upon the close of the transaction, projected to occur in the first half of 2024, the City of Cincinnati will receive cash consideration of approximately $1.62 billion. Norfolk Southern intends to finance the transaction through a combination of internal and external sources. The City of Cincinnati plans to use the proceeds of the transaction to form an infrastructure fund that will benefit the citizens of Cincinnati for generations to come. The trust would solely fund the rehabilitation, modernization, or replacement of existing infrastructure such as streets, bridges, municipal buildings, parks, and green space. The closing is subject to certain conditions, including approval by the voters of Cincinnati and the U.S. Surface Transportation Board.