UPDATE: Genesee & Wyoming to buy Providence & Worcester

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A Providence & Worcester aggregate train seen at Reeds Gap, Conn.
Scott A. Hartley
WORCESTER, Mass. — Genesee & Wyoming Inc. announced Monday that it would buy the Providence & Worcester for $126 million later this year.

The P&W owns more than 163 miles of track in Rhode Island, Massachusetts, and Connecticut and has operating rights on more than 350 miles of additional track, including exclusive freight access on the Northeast Corridor between Providence, R.I., and Queens, N.Y., in New York City.

According to a news release, the G&W will purchase all outstanding P&W stock for $25 per share. With shareholder approval, the deal is expected to go through during the fourth quarter of 2016. The merger will also have to be approved by the Surface Transportation Board.

The acquisition of the P&W further cements G&W’s dominance in the region. Jack Hellmann, G&W president and CEO, says the P&W will strategically fit with his company's other holdings in the area, including the New England Central and Connecticut Southern.

“Following anticipated STB approval of the acquisition, our connectivity with the P&W enables us to realize substantial immediate cost savings, to share and optimize the utilization of equipment and other assets, and to unlock significant new customer opportunities across sister G&W railroads as well as connecting partners at two Canadian Class I Railroads, two U.S. Class I Railroads and two regional railroads," Hellmann says. "Our acquisition of the P&W will ultimately enhance the efficiency and customer service of rail in New England."

The P&W will be managed as part of G&W’s Northeast Region, led by Senior Vice President Dave Ebbrecht.

Officials with the P&W say the acquisition will ensure quality service for its customers for years to come.
 
“Becoming part of the Genesee & Wyoming family with its record of emphasis on safety and investment in its rail infrastructure ensures that our company will continue to provide the quality of service which our customers and the communities we serve have enjoyed over the 40 plus years since we re-commenced independent operations while at the same time continuing and improving on our programs to promote employee and community,” says P&W CEO and Chairman Robert H. Eder.

The P&W has deep roots in New England. The railroad dates back to the 1840s when it ran through Massachusetts and Rhode Island. In 1892, the New Haven agreed to lease the P&W for 99 years. Four years after the NH was absorbed into Penn Central, the P&W regained its independence.

UPDATE: Full story and quotes from Genesee & Wyoming and Providence & Worcester. Aug. 15, 2016, 10:05 a.m. Central Daylight Time.

NEWSWIRETrains News Wire

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