MONTREAL –– CN on Dec. 6 reported signing and closing an agreement to acquire Iowa Northern (IANR), an approximately 275-mile U.S. regional railroad that it interchanges with in Waterloo and Cedar Rapids. Terms were not disclosed.
Editor’s Note: RT&S does not usually cover rail mergers, but this important story by Railway Age Executive Editor Marybeth Luczak is worth sharing with RT&S readers. For more background on the Iowa Northern, please check the November 2020 issue of RT&S. DCL
According to CN, the transaction “represents a meaningful opportunity to support the growth of local business by creating single-line service to North American destinations, while preserving access to existing carrier options.” The transaction has closed into an independent voting trust pending regulatory review by the Surface Transportation Board. A decision is expected in 2024, the Canadian Class I railroad said.
Map courtesy Iowa Northern
IANR serves upper Midwest agricultural and industrial markets, hauling such commodities as biofuels and grain. According to the regional’s website, it handles more than 60,000 carloads per year. Established in 1984, IANR runs diagonally through Iowa northwest to southeast from Manly to Cedar Rapids, with branch lines from Waterloo to Oelwein and from Forest City to Belmond (see map above). When a group led by Daniel Sabin, a second-generation railroader and current Chairman, took over management in 1994, the regional handled 15,000 revenue cars annually and its average track speed was under 10 mph, according to IANR.
IANR also interchanges with Union Pacific (UP) at Manly; Canadian Pacific Kansas City at Nora Springs; and UP and Railway Age two-time Short Line of the Year honoree Cedar Rapids and Iowa City (to Iowa Interstate Railroad) at Cedar Rapids.
“We are delighted to have reached an agreement with Iowa Northern Railway,” CN President and CEO Tracy Robinson said. “We look forward to the opportunities our combined network will provide customers, farmers, and our partners to respond to the needs of their existing and new markets. By enabling all of us to play an even more important role in this critical supply chain and densifying our southern network, we are accelerating sustainable, profitable growth.”
“We are very pleased to have reached a deal with CN,” Daniel Sabin said. “We believe CN shares IANR’s commitment to local stakeholders and that this transaction will be beneficial for customers, employees and the local Iowa economy. We are confident that, as part of CN, IANR will be able to continue to provide reliable first and last mile service to our local customers while providing them access to a much broader network and market.”
CN Map from October 2023 Investor Presentation