CN to acquire BC Rail
Canadian National Railway Co. said Tuesday it will pay the British Columbia government $1 billion in cash to acquire the outstanding shares of BC Rail Ltd., along with the right to operate over BC Rail's roadbed under a long-term lease.
'Purchasing the BC Rail franchise is a strategically important initiative for CN, one that will strengthen our forest products business and that has significant scope for shareholder value creation,' said E. Hunter Harrison, president and chief executive officer of CN.
Excluding 115 employees already inactive, BC Rail has a workforce of 1,380 employees. CN's operating plan is to reduce the workforce to 950, including 95 employees who would be surplus were it not for the company's plan to perform new mechanical work at BC Rail's Prince George Shop complex, and 60 employees to be relocated within CN's system in western Canada.
CN plans to invest $1 million in a new wheel shop at BC Rails' Prince George shops.
The B.C. government will enact legislation to effect the partnership with CN, the railroad said. The transaction is subject to approval by Canada's Competition Bureau and is expected to close in the first quarter.