ALGARY – Canadian Pacific Railway (TSX:CP) says it’s seeking potential buyers for a U.S. line that stretches about 1,000 kilometres across several states in the U.S. Midwest.
It’s the latest strategic move for the Calgary-based company since a new board of directors installed Hunter Harrison as its chief executive officer in the summer.
Harrison is an American-born retired CEO of Canadian National Railway (TSX:CNR) and is credited with turning the Montreal-based company into the most efficient major railway in North America.
Canadian Pacific announced from Minneapolis on Tuesday morning that it’s exploring strategic options for a line that runs from Tracy in Minnesota west into South Dakota, Nebraska and Wyoming.
CP assumed operation control of the line when it acquired Dakota, Minnesota & Eastern railroad in 2008.
It’s the second move this week that shows the altered states of the U.S. acquisition, including CP’s announcement Monday that it has deferred plans to extend one of its lines into a coal-producing area known as Powder River Basin.
CP says the main line and branch lines up for sale serve a number of grain, ethanol, clay and merchandise customers.
“This portion of the CP network would be an attractive and highly viable opportunity for a low-cost operator,” Harrison said in a statement.
“CP has successfully built many partnerships with shortline and Class 1 railroads throughout its system and we look forward to assessing the ways interested parties could work together with us to deliver quality service to customers on the west end of the DM&E through an innovative partnership.”
Harrison and other Canadian Pacific executives are expected to reveal more details of its strategic plans at an investor conference in New York. The event starts Tuesday afternoon and continues Wednesday.
Tuesday, December 4, 2012