Canadian National to buy U.S. rail, bulker company

Canadian National to buy U.S. rail, bulker company

The Canadian National Railway Co., Canada's largest freight railroad, said Monday it agreed to buy Great Lakes Transportation LLC for $380 million.

Canadian National, of Montreal, said the acquisition will help it expand its rail services between western Canada and the Midwest and to grow its presence in the business of transporting bulk materials for the steel industry.

Great Lakes Transportation owns the Bessemer and Lake Erie Railroad Co., and the Duluth, Missabe and Iron Range Railway Co., a large shipper of iron ore pellets in Minnesota and Wisconsin; Great Lakes Fleet Inc., an operator of eight Great Lakes bulk vessels, and the Pittsburgh & Conneaut Dock Co., a small switching railroad that performs transfer operations between ships and railroad cars for the Bessemer and Lake Erie in Conneaut, Ohio.

The railroads and other properties were originally formed by predecessors of United States Steel Corp. to move coal, iron ore and other materials from the Midwest to steel mills in the Pittsburgh area.

In 1988, U.S. Steel sold its majority interest in the companies to The Blackstone Group, a New York investment firm.

Canadian National said it expects ownership of the Great Lakes Transportation properties to increase revenue by $285 million a year. It expects to close the deal, pending regulatory approvals, by the middle of next year.