Feds OK sale of Maine's largest railroad, Pan Am, to giant CSX Corp.
File Photo / William Hall
Pan Am Railways, including the rolling stock shown here at the Rigby Yard in South Portland, is expected to have a new owner in June.
After hitting obstacles that held up its original timetable, the sale of Maine’s largest railroad, Pan Am, has received a federal green light and now appears to be chugging toward completion.
The Surface Transportation Board on Thursday approved the application by CSX Corp. (Nasdaq: CSX) to acquire North Billerica, Mass.-based Pan Am Railways Inc., which owns 400 miles of train tracks in Maine, or about a third of the state’s rail mileage.
CSX, one of the world’s largest freight carriers, announced the deal in November 2020, four months after Pan Am went up for sale. CSX now expects to close the transaction on June 1, the company said in a news release.
No terms have yet been disclosed, but industry experts initially speculated the sale price would be as much as $700 million.
The deal required approval of the board, and CSX had requested that the agency treat the purchase as a “minor transaction” that wouldn’t have to undergo the more stringent review process of larger deals.
But the request drew sharp rebukes from some lawmakers and transportation officials in Massachusetts and Vermont, who said the acquisition would reduce competition among freight carriers and adversely affect passenger rail service in the region. The board ultimately requested a "major" application.
In April 2021, CSX submitted an amended application, but the board ruled it was incomplete. The new application didn't contain a full, data-supported market analysis of the deal's effect on freight-carrying competition, the STB said.
CSX tried again last July, and since then the board has been reviewing the re-revised application, and held public hearings on it in January.
CSX, headquartered in Jacksonville, Fla., is one of North America's seven Class I railroads, and owns 20,000 miles of track serving every state east of the Mississippi River except Maine, New Hampshire and Vermont. The sale will help fill that gap and broaden the railroad’s reach in Connecticut, New York and Massachusetts.
Despite the objections in other states, the acquisition was welcomed by transportation officials in Maine and others including U.S. Sen. Susan Collins, R-Maine.
"A lot of traffic already goes out through CSX. So now we'll have a one-railroad connection up and down the Eastern seaboard," Nate Moulton, director of freight and passenger services for the Maine Department of Transportation, said last year.
"If you're shipping from Maine, you can do that day after day and know that you [freight] doesn't have to sit in an interchange. A one-railroad move will be smoother, and should cut cost and transit time."
In a news release Thursday, CSX President and CEO James M. Foote said, “We look forward to integrating Pan Am, their employees and the rail-served industries of the Northeast into CSX and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.”
David A. Fink, president of Pan Am Railways, said, “This much-anticipated decision paves the way for an exciting new chapter for Pan Am customers and our employees as we begin our transition to the CSX team.”
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