CSX Working With Goldman Sachs to Explore Options, Sources Say
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CSX Corp. is working with Goldman Sachs Group, people familiar with the matter said, as the company explores options to participate in rail consolidation after two major rivals announced a merger.
The Jacksonville, Fla.-based freight operator has spoken with the Wall Street bank about the merits of a merger, according to the people, who asked not to be identified discussing confidential information. Considerations may not lead to any transaction, the people said.
Representatives for CSX and Goldman Sachs declined to comment.
The talks come as U.S. railroad operators move toward a period of potential consolidation, led by Union Pacific Corp.’s $72 billion acquisition of Norfolk Southern Corp. The planned tie-up, announced this week, piles pressure on rivals including CSX and Berkshire Hathaway’s BNSF to pursue deals of their own in order to stay competitive.
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RELATED: Union Pacific-Norfolk Southern Merger Could Start Rail Trend
CSX CEO Joe Hinrichs said earlier in July that he’s open to merger talks with other companies. CSX’s network spans roughly 20,000 route miles of track in 26 states, the District of Columbia and the Canadian provinces of Ontario and Quebec.
Shares in CSX are broadly flat over the past 12 months, giving the company a market value of about $66 billion. On July 30, activist investor Ancora Holdings Group said it is a “growing shareholder” in the rail operator, which it believes has been underperforming.
Historically rail mergers have been difficult to consummate given the inhospitable regulatory environment. But one of the current Trump administration’s earliest moves was to elevate Patrick Fuchs to chair the Surface Transportation Board. Fuchs is seen as a proponent of industry consolidation.
David Carnevali, Kiel Porter and Liana Baker contributed to this report
