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Norfolk's rail share grows
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March 27, 1997: 6:40 a.m. ET
Norfolk Southern expected to get more than half of Conrail's routes
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NEW YORK (CNNfn) - Norfolk Southern Corp. will reportedly acquire more than half of Conrail Inc.'s railroad routes and will spend $700 million more than it had planned in splitting Conrail with CSX Corp.
Norfolk Southern is expected to get 57 percent of Conrail's lucrative Northeast rail network, the Wall Street Journal reported Thursday. Originally, Norfolk and CSX had agreed to split the routes evenly as part of the March 7 deal to end their rival takeover bids.
Under terms of the proposed agreement, Norfolk Southern's bigger share of the $10.3 billion deal will cost $5.9 billion for its part. It will also probably need to spend hundreds of millions more to update Conrail's facilities. CSX would spend about $4.4 billion for its share.
Neither Norfolk Southern nor CSX would comment on the discussions but an announcement is expected within a week, sources familiar with the matter told the Journal.
Norfolk Southern shares (NSC) lost 7/8 to close at 90-5/8 on the New York Stock Exchange Wednesday, while CSX Corp. (CSX) rose 7/8 to close at 48-1/8. Conrail (CRR) dipped 1/8 to 113.
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