Hello. I've been curious about railway mergers and I have a few questions. When one railway merges another railway into it, do both railways have to agree to the merger/take-over or not? When a merger occurs or a partnership like chessie system, does an integrated numbering system have to be used? When a partnership like chessie system or family lines is formed, which railway controls and runs the partnership company? Is there a holding company as well?
Freelancer with an interest in N&W, SCL, and other 70s railroads
Well, I can't answer most of your questions, but thought I'd throw this tidbit into the discussion. In the case of railroad mergers, they also have to be approved by the Interstate Commerce Commission (or whatever agency has taken over that function). Back when Southern Pacific and Santa Fe were working on a merger, they had already started painting locomotives in the new merger scheme (basically, Daylight colored Warbonnet design), but were leaving the SPSF Logo only half-painted until the final merger was approved. As it turned out, the ICC turned it down, and I believe their reasoning stated was something to the effect of it would give the new combined company too much of a monopoly in too large of a market area.
As far as who retains control, I think that has to do with whether it's a mutual merger or a buy-out merger. Union Pacific has accomplished a lot of mergers where all the other lines are absorbed into the UP system. In their case, I believe UP had the financial wherewithal to basically buy out the other lines, and as the new majority shareholders, this gives them the controlling say in how the merger happens.
"We do not quit playing because we grow old; we grow old because we quit playing." ~ Oliver Wendell Holmes
You might do betterto go to the Prototype section of this forum. I hae an idea that there could be different answers, depending on the situation of the merger, such as a takeover as apposed to a merger, not sure.
Good luck,
Richard
To answer you question in a simple matter:
The two companies must negotiate in order to make the merger successful. If they can't agree, then simply they won't go any further with the deal. If the two companies are traded publicly on the stock exchange, the stockholders must vote to approve of the deal. Then The Securities and Exchange Commision must approve of the deal. After the deal is settled, the two companies will work out more details and officially announce the new name.
If the one of the company's management, doesn't fully agree with the deal, then it becomes an acquisition.
In case of the two railroads merging it is called a horizontal merger, because they are in the same industry and perform essentially the same operations. A vertical merger would be where two companies merge who share different operations. For example if a car manufacturer merge with an auto parts manufacturer.
There are case where mergers have been unsuccessful. This is where the two companies' cultures did not work together. The most notable cases are AOL/Time Warner and Daimler/Chrysler.
Every merger deal is different. I have never heard of two mergers being exactly the same.
This article may help you understand the merger process.
http://en.wikipedia.org/wiki/Merger
Will
V&A C-628 Hello. I've been curious about railway mergers and I have a few questions. When one railway merges another railway into it, do both railways have to agree to the merger/take-over or not?
Hello. I've been curious about railway mergers and I have a few questions. When one railway merges another railway into it, do both railways have to agree to the merger/take-over or not?
Yes.
When a merger occurs or a partnership like chessie system, does an integrated numbering system have to be used?
Generally yes. Otherwise they will end up with engines with the same numbers.
When a partnership like chessie system or family lines is formed, which railway controls and runs the partnership company?
That's determined by the board of directors. Normally the bigger or more powerful one ends up controlling. Or the one with the most aggressive management.
Is there a holding company as well?
Maybe, maybe not. Depends on how the company is structured.
[/quote]
Dave H. Painted side goes up. My website : wnbranch.com
In regards to your question, since my family worked for the B&O before and after the merger to the C&O and the absorbing of W&M and the Family lines later here's how the progression went within the Chessie System. There wasn't a holding company used during the transition.
First road numbers, all existing units retained their existing road numbers until repainting or retirement from service either by sale or scrap. The primary Partner in this case was C&O dicated the equipment retention as well as new paint schemes or modification of paint schemes. In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella. If you look at the equipment B&O modfied their paint scheme to match C&O's. Look at the engines and passenger cars for example. When you look at any paperwork after the merger it always has the following: C&O/B&O example is timetables and menus on passenger trains as well as letterhead the primary road is first. Also the C&O had the control to dicate not only the abandonment of trackage or taking over trackage for their division, but what the B&O could or could not acquire for it's use. Later when they absorbed the W&M they decided to change the paint scheme to the tricolor that was the Chessie colors, all units retained their road numbers but if you look at the cabs each one had the home road on the cabs. i.e B&O, C&O, W&M this was done mostly for inventory reasons and can be seen in the annual reports from Chessie when it breaks down equipment by road, there were many units that had the same reporting numbers but under different divisions. It made thing a little confusing for bookkeeping so when the Chessie decided to buy the Family Lines they changed the Road name to CSX since this was the NYSE code used to trade stock with. At this time they streamlined all equipment to a single number system to remove dupilcates within the system. Also they began to standardize the equipment that was on the roster to cut cost on repairs and keep less spares on hand. Also at this time they began the relocation of the corporate's headquaters from Baltimore to Jacksonville Florida. Also all former roads acquired were retired so that no more fallen flags were being used by CSX as reporting marks as part of the new one road only mode.
Hope this helps.
Ray
Howdy--
That's a great question you've asked! I'm looking forward to reading along the various answers. Here's some information on railroad mergers, and railroad "family trees" (mergings) that may help you a bit. Also several sites that have information about mergers.
The first link is one that I've used before and think is pretty good for understanding how the railroads we see (or have seen) came to be. But it's simply a "family tree" perspective. The third link (Railroad Mergers Website) is one that I just found and looks to be interesting but I haven't had a chance to go read through it yet (I'm gonna though! :-) The last link is the Google search I did on mergers which has a lot of links that you can follow to find more information. Good luck, and feel free to post back anything you find for the rest of us! :-)
John
The Family Tree of North American Railroads:
http://www.spikesys.com/Trains/fmly_tre.html
RAILROAD MERGER LIST:
http://www.northeast.railfan.net/merger.html
Railroad Mergers WebSite:
http://www.ominousweather.com/Mergers.html
Google Search Keywords: (List of Railroad Mergers):
http://www.google.com/search?source=ig&hl=en&rlz=&=&q=list+of+railroad+mergers&btnG=Google+Search&aq=f&oq=
Most importantly, the Federal Railway Administration must approve the merger. Many proposed mergers have been disapproved by the government over the years, such as the proposed merger of the Southern Pacific and Santa Fe.
cacole Most importantly, the Federal Railway Administration must approve the merger. Many proposed mergers have been disapproved by the government over the years, such as the proposed merger of the Southern Pacific and Santa Fe.
Not the FRA, the ICC, Interstate Commerce Commission, (pre-1980's) or the STB, Surface Transportation Board. The FRA just handles safety and operating issues.
Back around 1980, Guilford (now Pan Am) bought Boston & Maine, Maine Central and Deleware & Hudson railroads. They kept B&M and MEC, but sold off D&H after a few years. In most cases, locomotives retained their original numbers and had B&M, MEC or D&H stenciled on the cab side. Some locomotives were transferred between the 3 railroads and some of these were renumbered.
One of the things Guilford managment wanted to do was reduce costs by changing work rules including the number of people on a train crew. The unions were having none of this and there were a lot of arguments and hard feelings. Guilford eventually "solved" their problem by making the 3 big RRs subsidary to the Springfield Terminal Railroad, which had been a small subsidary that handled local switching. As primarily a terminal switching RR, ST had more flexible work rules and small train crews; with this reorganization, these rules were imposed throughout the system. The unions were basically told work to the new rules or find work elsewhere. There were strikes, and long term employees were fired and replaced by new non-union workers. This was all a very bad scene. IN the 80s and 90s someone did not want to show up at a train show with a Guilford painted loco; they would be asked to leave.
The only original ST locomotive was a GE 44 tonner; this quickly changed as a number if first and second generation 4-axle locomotives were moved over to ST. Guilford also purchased a number of new and used locomotives to replace the older 1st generation locomotives including some 6-axle diesels that wer assigned to ST - quite a change from that single 44 tonner.
George In Midcoast Maine, 'bout halfway up the Rockland branch
I have been a member of this forum for quite a few years. I have seen many topics of how CSX got it's name and it seemed there was no exact answer. I have to go with" B&O SteamDemons" comment, that is the most logical answer about CSX i have ever heard.
That is the correct scenario for CSX, except if I remember correctly, it was actually CSXT, the T was dropped within the first year or two.
Jay
C-415 Build: https://imageshack.com/a/tShC/1
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willy6 I have been a member of this forum for quite a few years. I have seen many topics of how CSX got it's name and it seemed there was no exact answer. I have to go with" B&O SteamDemons" comment, that is the most logical answer about CSX i have ever heard.
TRAINS magazine ran an article a few years back which included an interview with Hays T. Watkins, the President of Chessie System, who was tasked with naming the merged railroads. He stated that he came up with CHESSIE SEABOARD EXPANDED,abbreviated to CSX, as the name for the holding company that would be formed(and the Stock symbol for said company). That was not originally supposed to be the name of the railroad subsidiary (I.M.O "Chessie Seaboard Railroad" would have been a better name) but in the process of completing the merger, coming up with a better name was a low priority..
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
modelmaker51 That is the correct scenario for CSX, except if I remember correctly, it was actually CSXT, the T was dropped within the first year or two.
It still is the CSXT. Railroad initials can't end in an "X", that indicates private owner equipment. CSX equipment all have initials of CSXT.
Wikipedia does a nice job with a consistent presentation. Not only are there tons of weblinks, but; also regulatory-historical perspective.
Penn Central for example: "It was created by the merger on February 1, 1968, of the Pennsylvania Railroad and the New York Central Railroad. The New York, New Haven and Hartford Railroad was added to the merger at the insistence of the Interstate Commerce Commission (ICC) on January 1, 1969."
CSX and its 'T': "The T had to be added to CSX when used as a reporting mark because reporting marks that end in X means that the car is owned by a leasing company or private car owner of some sort."
Each railroad below will open a new browser tab => To compare each railroad-system map side-by-side:
[1] Pennsylvania (1846) -- New York Central (1831) -- New Haven (1872).
[2] (into) Penn Central (1968).
[3] (and others into) Amtrak (1971).
[4] (with others into) Conrail (1976).
[5] (then PRR-parallel 1999-split into) Norfolk Southern (1990).
[6] (then NYC-parallel 1999-split into) CSX Transportation (1980).
Don't forget to easily link into many fallen flag predecessors like Western Maryland, Baltimore & Ohio, Central New Jersey, Seaboard Coast Line, etc. And to think the Pennsylvania Railroad was once the Standard of the World.
Conemaugh Road & Traction circa 1956
Ray wrote:In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella.
-------------------------------------------
First the C&O/B&O was not merged nor was the WM..
The C&O took control of the B&O in 1962 and the B&O/C&O took control of the Western Maryland in 1967 .The Chessie System was the parent company for these 3 roads.The mergers came in this order and after the formation of CSX.
B&O formally merged WM on May 1, 1983.
On April 30, 1987 the B&O was merged into the C&O.
CSX Transportation merged C&O on August 31, 1987.
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
V&A C-628: Some rail mergers are basically hostile take overs especially in the era of the rail barons. A hedge fund out of England wanted to invest in CSX a couple of years ago. CSX viewed this as a hostle move and tried to stop them ,as they, CSX felt they would lose control of the company. It turned out, through negotiation between the two parties, to be an amicable settlement., allowing the hedge fund to invest in CSX.. Some mergers result in holding companies. PC was controlled by a holding company. Usually the stronger and larger company is the parent, but not always. Examples of smaller size companies taking over larger ones were DRG taking over SP or SOO taking over the MILW. Usually the merger partners have to agree to the merger. The Feds give the final approval to mergers and may change conditions of the merger to stifle opposition of other railroads that may view the merger as detrimental to them.
The Ferroequinologist layoutconcepts@yahoo.com eBay store: Backshop Train & China Store Facebook: Model Trains, Train Sets, Buildings & Layout Concepts
Yes a "merger" is two or more railroads agreeing to join into one company. As noted, sometimes in years gone by, a rail baron would buy up shares in a rival company in the 19th century, but generally if he did take over the other railroad he continued to operate it as a separate railroad. Also, "merger" tends to imply the joining of two or more relatively equal companies. That's different from a big railroad buying a little one, such as Northern Pacific buying the St.Paul & Duluth RR in 1900 to get a more direct route between Mpls/St.Paul and Duluth/Superior.
Remember too, as someone noted, railroad mergers have to be approved by the companies involved and the government. Neighboring railroads can raise objections too. Starting with the Theodore Roosevelt administration, the government has often denied two railroad's request to merge, such as James J. Hill's desire to combine the NP and GN into one company. His first attempt came around 1910, and wasn't actually accomplished until 1970.
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BRAKIE Ray wrote:In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella. ------------------------------------------- First the C&O/B&O was not merged nor was the WM.. The C&O took control of the B&O in 1962 and the B&O/C&O took control of the Western Maryland in 1967 .The Chessie System was the parent company for these 3 roads.The mergers came in this order and after the formation of CSX. B&O formally merged WM on May 1, 1983. On April 30, 1987 the B&O was merged into the C&O. CSX Transportation merged C&O on August 31, 1987.
B&O SteamDemon BRAKIE: Ray wrote:In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella. ------------------------------------------- First the C&O/B&O was not merged nor was the WM.. The C&O took control of the B&O in 1962 and the B&O/C&O took control of the Western Maryland in 1967 .The Chessie System was the parent company for these 3 roads.The mergers came in this order and after the formation of CSX. B&O formally merged WM on May 1, 1983. On April 30, 1987 the B&O was merged into the C&O. CSX Transportation merged C&O on August 31, 1987. In regards to your brake down of the mergers of the roads, If you looked at the operational side of the B&O/C&O when the C&O leveraged control of the B&O for most of the employees it was a merger as far as they were concerned. C&O called the shots but both road continued to operate independent of each other until the late 60's when they absorbed the W&M. It was the Chessie System unofficially in the early 60's coming from the C&O's chessie cat. I have documents from that time line that talks about the new chessie system between B&O and C&O. It's on C&O letterhead dated 5-63.
BRAKIE: Ray wrote:In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella. ------------------------------------------- First the C&O/B&O was not merged nor was the WM.. The C&O took control of the B&O in 1962 and the B&O/C&O took control of the Western Maryland in 1967 .The Chessie System was the parent company for these 3 roads.The mergers came in this order and after the formation of CSX. B&O formally merged WM on May 1, 1983. On April 30, 1987 the B&O was merged into the C&O. CSX Transportation merged C&O on August 31, 1987.
I was employed by the C&O when the mergers took place except when the C&O was folded into the CSX-FRED had my job by then...Under the Chessie all roads operated as independents with Chessie as the parent.My seniority and pay was C&O and meant nothing on the B&O and WM-these roads had their own seniority and Union agreements...Also note I was hired by the C&O under the Chessie System and for accounting purposes a C&O employee although my checks had Chessie System on them.
And that's the way it was in the rank and file.
BRAKIE B&O SteamDemon: BRAKIE: Ray wrote:In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella. ------------------------------------------- First the C&O/B&O was not merged nor was the WM.. The C&O took control of the B&O in 1962 and the B&O/C&O took control of the Western Maryland in 1967 .The Chessie System was the parent company for these 3 roads.The mergers came in this order and after the formation of CSX. B&O formally merged WM on May 1, 1983. On April 30, 1987 the B&O was merged into the C&O. CSX Transportation merged C&O on August 31, 1987. In regards to your brake down of the mergers of the roads, If you looked at the operational side of the B&O/C&O when the C&O leveraged control of the B&O for most of the employees it was a merger as far as they were concerned. C&O called the shots but both road continued to operate independent of each other until the late 60's when they absorbed the W&M. It was the Chessie System unofficially in the early 60's coming from the C&O's chessie cat. I have documents from that time line that talks about the new chessie system between B&O and C&O. It's on C&O letterhead dated 5-63. I was employed by the C&O when the mergers took place except when the C&O was folded into the CSX-FRED had my job by then...Under the Chessie all roads operated as independents with Chessie as the parent.My seniority and pay was C&O and meant nothing on the B&O and WM-these roads had their own seniority and Union agreements...Also note I was hired by the C&O under the Chessie System and for accounting purposes a C&O employee although my checks had Chessie System on them. And that's the way it was in the rank and file.
B&O SteamDemon: BRAKIE: Ray wrote:In the case of the B&O/C&O merger the two roads continued to operate as independent roads under one umbrella. ------------------------------------------- First the C&O/B&O was not merged nor was the WM.. The C&O took control of the B&O in 1962 and the B&O/C&O took control of the Western Maryland in 1967 .The Chessie System was the parent company for these 3 roads.The mergers came in this order and after the formation of CSX. B&O formally merged WM on May 1, 1983. On April 30, 1987 the B&O was merged into the C&O. CSX Transportation merged C&O on August 31, 1987. In regards to your brake down of the mergers of the roads, If you looked at the operational side of the B&O/C&O when the C&O leveraged control of the B&O for most of the employees it was a merger as far as they were concerned. C&O called the shots but both road continued to operate independent of each other until the late 60's when they absorbed the W&M. It was the Chessie System unofficially in the early 60's coming from the C&O's chessie cat. I have documents from that time line that talks about the new chessie system between B&O and C&O. It's on C&O letterhead dated 5-63.
When the Soo Line bought the Minneapolis Northfield and Southern in the early eighties (to provide a connection to the former Rock Island "spine line" that they thought they were going to acquire), a provision in the deal said that the former MN&S employees were given first choice on former MN&S jobs. If they wanted to, they could use their seniority to get other jobs in the Soo, but Soo employees could only get a former MN&S job if no MN&S guys wanted it.