Canadian Pacific closes on purchase of Maine rail line involved in 2013 disaster
Courtesy / Central Maine & Quebec Railway, Harry Gordon
The Central Maine & Quebec Railway, a Bangor-based freight line whose predecessor was involved in a disastrous 2013 derailment, has been purchased for $130 million.
Bangor-based Central Maine & Quebec Railway, formerly owner of the runaway freight train that created an inferno killing 47 people in 2013, has been sold to Canadian Pacific Railway.
The $130 million deal was announced last November. Canadian Pacific (TSX, NYSE: CP) completed the purchase of Central Maine & Quebec’s Canadian subsidiary in December, and closed Wednesday on the U.S. acquisition, according to a news release.
The two sales give Canadian Pacific access to CM&Q’s 481 miles of track in Maine, Vermont and Quebec, and allows CP to link to shipping at Searsport via Eastern Maine Railway. Altogether, the Alberta-based company now owns 13,000 miles of rail between the Atlantic and Pacific coasts, across six Canadian provinces and 11 U.S. states.
"This transaction is a generational business opportunity for CP," said President and CEO Keith Creel in the release. "It enables us to serve customers through a larger coast-to-coast network across Canada and brings a direct Class 1 freight-rail service to the State of Maine for the first time in decades.”
Central Maine & Quebec was formed in 2014 by an affiliate of Fortress Investment Group, which had bought Montreal, Maine & Atlantic Railway at auction for $14.25 million.
Montreal, Maine & Atlantic had declared bankruptcy in 2013, after one of its crude-oil trains rolled downhill and derailed in Lac-Mégantic, about 10 miles from the Maine border near Jackman. The resulting deadly fireball destroyed much of the small Quebec town’s center and caused over $200 million in damage.
Fortress spent about $55 million over five years to rebuild the rail operator as well as its tracks and rolling stock, according to an industry publication.
Since Canadian Pacific began the acquisition process last year, the COVID-19 pandemic has altered transportation between the United States and its largest trading partner. While rail traffic generally remained steady in March, the number of rail containers entering the U.S. at Jackman was 1,249, the lowest total in two years and a 37% decline from March 2019.
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