The transaction will close into a voting trust, the trustee of which will control the railroad until the Surface Transportation Board (STB) approves the transaction, which is expected to be in late January or early February.
"The Ann Arbor is a true shortline success story," said Watco Executive Vice President and COO Rick Baden. "We look forward to the opportunity of working with the Ann Arbor team to serve its strong customer base in an important economic region of the country and build off of the tremendous value the Ann Arbor creates for its customers."
The AA serves southeastern Michigan and the Toledo, Ohio markets, focusing mostly on the automobile and manufacturing industries. The AA operates 50 miles of mainline track between Ann Arbor, Mich., and Toledo, as well as significant rail terminals in the Toledo area focused on automobile loading for industry leaders Chrysler, General Motors and Ford. The railroad interchanges with Class 1 railroads Canadian National, CSXT and Norfolk Southern, as well as shortlines Great Lakes Central, Indiana & Ohio and Wheeling & Lake Erie.
"This acquisition expands our rail network in the state of Michigan and allows us to build stronger relationships with our customers while also giving Watco the opportunity to serve the state of Ohio and its important industrial base," said Ed McKechnie, Watco chief commercial officer.
"The Ann Arbor Railroad team has prided itself in delivering high quality service to our customers," said Jim Erickson, president of the Ann Arbor Railroad. "We are going to continue to build on that high expectation of service and look forward to working together with the rest of the Watco team."
The transaction before the STB will place the AA into a voting trust to allow the transaction to close once all approvals are received from the STB.