Canadian National Railway deal chugs on despite deadline

BY KEITH BENMAN, Times of Northwest Indiana
kbenman@nwitimes.com

A stock purchase agreement that expired at midnight today does not appear to stand in the way of Canadian National Railway's acquisition of the EJ&E Railway.

Canadian National officials are not commenting directly on their $300 million stock purchase agreement with U.S. Steel Corp. for its EJ&E Railway, but a spokesman said Wednesday they remain hopeful the deal will soon be completed.

On Christmas Eve, federal regulators approved CN's purchase subject to certain conditions with an effective date of Jan. 23. Barring successful appeals, that removed the last significant roadblock to the purchase.

"We are still optimistic we will be able to close this purchase after the effective date of Jan. 23," said CN spokesman Jim Kvedaras, on Wednesday.

U.S. Steel is not commenting on the stock purchase agreement and is referring all questions to CN, U.S. Steel spokesman John Armstrong said Tuesday.

On the day the federal Surface Transportation Board issued its approval, CN Chief Executive E. Hunter Harrison cited the Jan. 23 date and said the railroad "expects to be in a position to close on the transaction shortly thereafter."

Citizens' groups in Illinois and politicians including U.S. Rep. Pete Visclosky, D-Ind., have vowed to appeal the federal decision.

In November, a federal appeals court ruled against forcing the STB to speed up its review of the purchase. At that time, CN officials cited the year-end expiration of their stock purchase agreement with U.S. Steel in urging the STB to rule quickly.

CN's purchase of the 198-mile EJ&E will lead to a three-fold increase in rail traffic through communities including Lynwood, Dyer, Schererville, Griffith and Gary. The proposed change aroused unprecedented citizen opposition in Northwest Indiana and Chicago's west and south suburbs.