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CSX, Norfolk to Split Up Conrail Operations

May 31, 1999|Reuters

Rail giants CSX Corp. and Norfolk Southern Corp. today will split up the operations of Conrail, jump-starting their respective bids to streamline service and lure millions of shipments from trucks to rail. Two years after engineering their joint $10.3-billion Conrail acquisition, the two Virginia-based railroads will switch over Conrail computers and divvy up tracks, locomotives and freight cars largely idled over the Memorial Day holiday. But shipping and rail executives said the rival railroads will spend much of the summer ironing out operations on their expanded systems before aggressively courting shippers with offers of quicker north-south shipments and lower rates. In the deal, Norfolk, Va.-based Norfolk Southern acquired 58% and CSX 42% of Conrail. Both railroads took on heavy debt loads to finance the deal and promised investors solid revenue and earnings growth from the acquisition.

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