Thursday, September 06, 2007

Big railroad deal Canadian Pacific Railway, Canada's #2 railroad, announced it would buy acquire Dakota Minnesota & Eastern Railway. The deal seems to be for about $1.5 billion, with the possibility of an added $1 billion in contingency fees. DM&E is the #1 regional railroad in the US, part of an industry dominated by four giant companies nationally. Its desirability is in terms of its reach into Wyoming coal country, along with 2,600 miles of track to add to its 9,100 miles of solely-owned and 4,200 miles of jointly-owned track. US railroad giants Union Pacific and Burlington Northern railroads are have had a duopoly in coal shipments from the booming Wyoming coal region, and it is thought that they may challenge the deal. One plan is for CP to extend DM&E's current reach into coal; country with a multi-billion track extension, something DM&E had already been planning. The thought is that CP could ship coal to power plants in the Midwest and Eastern US. CP owns two US railroads, the Delaware & Hudson, which reaches into New York State.and the Soo Line, which reaches into the upper Midwest. Other good hauled include agricultural products and, increasingly, ethanol. 8:46:13 PM

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