CSX-Pan Am Deal a “Significant” Transaction: STB

The U.S. Surface Transportation Board has ruled the CSX-Pan Am merger transaction a “significant” one subject to more formal review, along with a 10-month time clock on a final decision.

The STB “ has reviewed the submission filed Feb. 25, 2021, by CSX Corporation (CSXC), CSX Transportation Inc. (CSXT),  747 Merger Sub 2, Inc. (747 Merger Sub 2), Pan Am Systems, Inc. (Systems), Pan Am Railways, Inc. (PAR), Boston and Maine Corporation (Boston & Maine), Maine Central Railroad Company (Maine Central), Northern Railroad (Northern), Portland Terminal Company (Portland Terminal), Springfield Terminal Railway Company (Springfield Terminal), Stony Brook Railroad Company (Stony Brook), and Vermont & Massachusetts Railroad Company (V&M) (collectively, Applicants),” the agency said in the Federal Register. “The submission is styled as an application for a ‘minor’ transaction seeking Board approval for: (1) CSXC, CSXT, and 747 Merger Sub 2 to control the seven railroads controlled by Systems and PAR, and (2) CSXT to merge six of the seven railroads into CSXT. This proposal is referred to as the ‘Proposed Transaction.’”

“The Board finds that the Proposed Transaction would be a ‘significant’ transaction,” STB said. “The Board’s regulations require that applicants give notice two to four months prior to the filing of an application in a ‘significant’ transaction. Because Applicants argue that the Proposed Transaction is a ‘minor’ transaction, they did not file the required prefiling notification before their Feb. 25, 2021 submission seeking Board approval of this ‘significant’ transaction and did not pay the filing fee for a ‘significant’ transaction. Their submission cannot be treated as an application at this time. The Board will, however, consider the Feb. 25, 2021 submission a prefiling notification and publish notice of it in the Federal Register, which will permit Applicants to perfect their application by supplementing their submission with the requisite information for a ‘significant’ transaction in accordance with the Board’s regulations, between April 25 and June 25, 2021 (i.e., two to four months after the Notice was filed).

“When filing a prefiling notification, merger applicants in a ‘significant’ transaction must propose a procedural schedule for Board review of their proposed transaction. As part of their tender of an application for a ‘minor’ transaction, Applicants had proposed a procedural schedule that tracks the statutory deadlines for processing ‘minor’ applications. Because the Board finds the proposed transaction to be “‘significant,’ Applicants must file with the Board no later than April 1, 2021, a revised proposed procedural schedule that reflects the Board’s determination that this is a ‘significant’ transaction. The proposed procedural schedule should indicate the approximate filing date of its supplement perfecting its application for a ‘significant’ transaction, which date, as noted, must be between April 25 and June 25, 2021. Comments on the proposed procedural schedule will be due 10 days after publication of the proposed procedural schedule in the Federal Register.

“The Board’s regulations also call for merger applicants to indicate in their prefiling notification the year to be used for the impact analysis required in ‘significant’ transactions. In their Notice, Applicants used operating data from 2019 in their Operating Plan-Minor. The Board therefore will designate 2019 as the year to be used for impact analysis in the application unless Applicants indicate otherwise when they submit the proposed procedural schedule.”