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CSX, Norfolk split Conrail
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March 7, 1997: 10:12 p.m. ET
$10.3 billion compromise ends bitter fight between giant railroads
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NEW YORK (CNNfn) -- Railroad giants CSX Corp. and Norfolk Southern Corp. ended a bitter bidding war Friday for Conrail Corp. by agreeing to split the railroad between them in a deal valued at $10.3 billion in cash.
"Conrail's board and management would have preferred for the Conrail system to remain intact," Conrail Chairman David LeVan said in announcing the deal. "However, under the circumstances as they developed, we have succeeded in negotiating the best possible transaction for all of Conrail's constituencies."
Added Norfolk Chairman David Goode: "We believe this is a sound basis on which to build an internationally competitive economy ... and that the benefits of this compromise extend to our companies, employees and customers."
Under terms of Friday's deal, Norfolk will drop opposition to a sweetened deal under which CSX will pay investors $115 cash by June 2 for each Conrail share held.
At the same time, CSX will work out a deal to sell Norfolk large parts of Conrail's assets, particularly in the key Eastern U.S. market.
The compromise capped a four-month-old bidding war for Conrail.
Conrail originally agreed in October to an $8.4 billion friendly cash-and-stock takeover by CSX.
However, Norfolk stepped in with an all-cash, hostile bid that eventually reached $10.3 billion.
That prompted Conrail shareholders to overrule the railroad's management and reject the CSX offer -- forcing the railroad to work out a compromise with Norfolk.
-- Jerry Kronenberg
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