MONROEVILLE, Pennsylvania, October 20, 2003 – Great Lakes Transportation LLC (GLT) announced today that an agreement has been reached to sell its railroad and related holdings to Montreal-based Canadian National Railway Company (CN) for $380 million.
The transaction is subject to a determination by the U.S. Surface Transportation Board (STB) that it is a minor one under the STB’s merger rules and, ultimately, to STB approval. Reviews by the U.S. Maritime Administration and Coast Guard are required for CN’s acquisition of Great Lakes Fleet (GLF). A review of CN’s acquisition of GLF by the U.S. Federal Trade Commission and the Department of Justice Antitrust Division is also required. CN has chosen to charter the GLF vessels to a third party that will lease and operate the ships on CN’s behalf. The third party will be totally independent from and unaffiliated with CN.
The transaction is expected to close by mid-year 2004. CN would exercise control of the GLT carriers soon after receipt of the requisite approvals.
“This is the culmination of a process that we first described to our GLT colleagues last May,” said John E. Giles, president and CEO of GLT, referring to earlier communication to employees describing the sales effort. “CN’s interest in the entire GLT enterprise and their focus on safety, service, and efficiency bodes well for their customers and for ours. This transaction is a good outcome in a number of ways. It’s good for GLT employees in that CN has no plans to eliminate rail lines or terminals, no plans to change dock operations, and no plans to close gateways. And it’s good for customers, since they’ll be served by a company that has demonstrated its commitment to high standards of customer care and satisfaction, and has the strongest balance sheet of the North American Class I railroads.”
CN spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver; Prince Rupert, B.C.; Montreal; Halifax; New Orleans; and Mobile, AL; and the key cities of Toronto; Buffalo; Chicago; Detroit; Duluth, MN/Superior, WI; Green Bay, WI; Minneapolis/St. Paul; Memphis; St. Louis; and Jackson, MS; with connections to all points in North America.
Monroeville, PA-based Great Lakes Transportation LLC owns businesses principally engaged in the transportation and handling of bulk commodities. Its units, which operate in four states and on four of the Great Lakes, include the Great Lakes Fleet, Inc.; the Duluth, Missabe & Iron Range Railway Company; the Bessemer and Lake Erie Railroad Company; and The Pittsburgh & Conneaut Dock Company. Key GLT facts:
- The GLT companies have evolved over the years to serve steel-making facilities that were the predecessors of today’s United States Steel Corporation (USS).
- Many GLT predecessor companies date back to the 19th century.
- Prior to 1988, the GLT companies were wholly owned transportation subsidiaries of USS.
- In 1988, these subsidiaries were acquired by a holding company jointly owned by New York City-based Blackstone Capital Partners (BCP) and USS.
- In March 2001, the holding company was reorganized; BCP became sole owner of the GLT carriers and USS became sole owner of the holding company’s other subsidiaries.
- CN will acquire the GLT carriers from GLT’s parent, BCP.
- GLT annual revenue: $215 million
- Employees (as of 9/30/03): 970
- Road miles: 382
- Locomotives: 63
- Vessels: Eight