Norfolk Southern Corporation (NSC) announced the execution of a purchase agreement under which NSC's subsidiary Norfolk Southern Railway Company will acquire substantially all of the assets of the Cincinnati Southern Railway (CSR).
CSR is an approximately 337-mile railroad that runs from Cincinnati, Ohio to Chattanooga, Tennessee.
CSR is currently owned by the City of Cincinnati and operated by the Cincinnati, New Orleans and Texas Pacific Railway Company (CNOTP), a wholly owned subsidiary of Norfolk Southern Railway, under a lease agreement expiring in 2026.
The new deal provides the company ownership of approximately 38,445 m² of land that sits under infrastructure maintained and operated by Norfolk Southern.
Additionally, it ensures Norfolk Southern will own the line in perpetuity, while eliminating uncertainty around future lease costs. The line is one of the highest density segments of the company's network, with as many as 30 trains a day traveling the route.
"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," commented Norfolk Southern president and CEO Alan H. Shaw.
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 US$1.62 billion. The closing is subject to certain conditions, including approval by the voters of Cincinnati and the US Surface Transportation Board.
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.