NEW YORK — The Wheeling & Lake Erie Railway — at 840 miles the largest independent regional railroad in the U.S. — is being acquired by FTAI Infrastructure in a billion-dollar deal, the companies announced today.
FTAI, which owns short line and terminal switching operator Transtar, will pay The Wheeling Corp. $1.05 billion to acquire the regional railroad created from lines that Norfolk Southern spun off in 1990. FTAI is managed by an affiliate of Fortress Investment Group.
The Class II W&LE serves more than 250 customers in Ohio, Pennsylvania, West Virginia, and Maryland. The W&LE connects to Transtar’s Union Railroad in the Pittsburgh area.
“Growing our freight rail platform has been a key focus for FIP, and we are thrilled to have this opportunity to combine with the W&LE,” FTAI CEO Ken Nicholson said in a statement, using the company’s FIP stock ticker. “We believe the W&LE is an excellent candidate for a combination with Transtar, adding scale, diversification, and network reach. Together, Transtar and the W&LE have identified several growth opportunities and operating efficiencies that we expect to drive substantial growth.”
Since 1992, Wheeling Corp. CEO Larry Parsons has been the driving force behind the rebirth of the W&LE. He guided the railroad through a period of extraordinary change and transformed a coal-dependent line into a modern, customer-focused regional railroad, FTAI said.
“His leadership has left an indelible mark on the company and the communities it serves. In seeking a long-term partner to carry this legacy forward, Mr. Parsons chose FTAI Infrastructure Inc. and Transtar, whose values and operational excellence reflect the foundation he spent a lifetime building,” FTAI said.
The railroad carries more than 140,000 carloads per year, interchanges with three Class I railroads and 16 regional and short line railroads, and employs more than 425 people.
W&LE currently handles steel and raw materials to and from five different mills; aggregates from three different quarries; chemicals; industrial minerals, including frac sand; plastic products; grain and food products; lumber; paper; and petroleum products, including LPGs and NGLs produced in the Marcellus and Utica shale formations.
W&LE mainline tracks are rated for 286,000 pounds gross weight, with mainline track speed of 40 mph as a result of the installation of over 170,000 new ties, and continuous welded rail, as well as improvements made to its bridges and tunnels.
The transaction is expected to close into a voting trust in the third quarter of 2025, subject to customary closing conditions. FTAI said it expects to gain control of the W&LE upon receipt of approval by the STB, at which time the W&LE will be an affiliate of Transtar.
Pittsburgh-based Transtar operates former U.S. Steel properties, including The Union Railroad; the East Ohio Valley Railway; The Lake Terminal Railroad in Lorain, Ohio; the Delray Connecting Railroad in the Detroit area; The Gary Railway in Indiana; The Fairfield Southern in Alabama; and the Texas & Northern.
In May 1990, Wheeling Acquisition Corp. paid Norfolk Southern $40 million for 446 miles of track that became the core of today’s W&LE. NS simultaneously leased the new railroad an additional 121 miles of track.
Did you know, that conceivably, by stringing the IAIS, the C F & E, and the W & LE together with a little trucking at the east end, you can reach from Omaha NE to the East Coast intermodally?
The W&LE of old was envisioned as a key link between Toledo and Pittsburgh as part of George Jay Gould’s attempts to assemble a transcontinental railroad in the late 19th century and, in the 1930s, joined a coalition of roads known as the Alphabet Route which ran the high priority “Alpha Jets” between St. Louis, Chicago and Boston. Alpha Jet service featured 34 hour (second morning) Chicago to Philadelphia TOFC delivery into the early 1980s when Western Maryland was absorbed by Chessie and the eastern links collapsed into Conrail.
I had the same thought, but I added the Indiana & Ohio Railway to get to Detroit and Cincinnati, although you you still need trackage rights on CN and Conrail to get to Detroit.
And if you get trackage rights on Norfolk Southern east from Akron, the W&LE could connect to the Western New York & Pennsylvania, and if you get trackage rights from their eastern end on NS you could connect with the Susquehanna and get rail all the way to New Jersey.
Off hand, probably CN via their ownership of the Bessemer.
I would guess CN is the third Class One.
CSX, NS: What’s the third Class I?