[Federal Register Volume 79, Number 234 (Friday, December 5, 2014)]
[Notices]
[Pages 72244-72245]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28571]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35877]


Genesee & Wyoming Inc.--Acquisition of Control Exemption 
(Including Existing Interchange Commitment)--Arkansas Midland Railroad 
Company, Inc., The Prescott and Northwestern Railroad Company, and 
Warren & Saline River Railroad Company

    Genesee & Wyoming Inc. (GWI),\1\ a publicly traded non-carrier 
holding company, has filed a verified notice of exemption pursuant to 
49 CFR 1180.2(d)(2), to acquire control of the following Class III rail 
carriers: Arkansas Midland Railroad Company, Inc. (AKMD), The Prescott 
and Northwestern Railroad Company (PNW), and Warren & Saline Railroad 
Company (WSR) (collectively, the Acquired Railroads).\2\ The Acquired 
Railroads are currently owned and under the common control of Pinsly 
Railroad Company (Pinsly).\3\ GWI has submitted to the Board a 
redacted, public version of its Stock Purchase Agreement with 
Pinsly.\4\
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    \1\ Most recently, GWI was authorized to control Rapid City, 
Pierre & Eastern Railroad, Inc. (RCP&E), in common control with 
other carriers in GWI's corporate family, upon RCP&E's becoming a 
Class II carrier. See Genesee & Wyo. Inc.--Continuance in Control 
Exemption--Rapid City, Pierre & E. R.R., FD 35800 (STB served Mar. 
27, 2014). GWI provides with its verified notice of exemption a map 
showing the locations of the GWI-controlled railroads.
    \2\ AKMD connects with WSR at Warren, Ark. See Pinsly R.R.--
Control Exemption--Warren & Saline River R.R., FD 35293 (STB served 
Nov. 3, 2009). The Board has previously issued notices of exemption 
under 49 CFR 1180.2(d)(2) where some of the railroads to be acquired 
connect with each other. See, e.g., SteelRiver Infrastructure 
Partners--Control Exemption--Patriot Rail (SteelRiver), FD 35622 
(STB served May 23, 2012); Patriot Woods R.R.--Acquis. & Operation 
Exemption--Weyerhaeuser NR Co., Weyerhaeuser Woods R.R. Operating 
Div., FD 35431 (STB served Nov. 5, 2010) (authorizing two of the 
railroads later involved in SteelRiver to connect with each other).
    \3\ The Acquired Railroads own and operate rail lines solely 
within the State of Arkansas.
    \4\ With its verified notice of exemption, GWI filed under seal 
an unredacted version of its Stock Purchase Agreement and a motion 
for protective order to allow limited access to that agreement and 
other materials GWI has filed under seal. That motion is being 
addressed separately.
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    GWI states that: (1) The Acquired Railroads do not connect with any 
of GWI's subsidiary railroads; \5\ (2) the proposed transaction is not 
part of a series of anticipated transactions to connect the Acquired 
Railroads and any of GWI's subsidiary railroads; and (3) the proposed 
transaction does not involve a Class I rail carrier. The proposed 
transaction is therefore exempt from the prior approval requirements of 
49 U.S.C. 11323 pursuant to 49 CFR 1180.2(d)(2).
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    \5\ According to GWI, AKMD and one of GWI's existing 
subsidiaries, Little Rock & Western Railway, L.P. (LRWN) both 
interchange with Union Pacific Railroad Company (UP) in the same 
yard in Little Rock, Ark. GWI states, however, that neither AKMD nor 
LRWN have the right to use any UP facilities to connect with each 
other.
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    Through its verified notice of exemption, GWI seeks to acquire all 
of the issued and outstanding stock of the Acquired Railroads from 
Pinsly. GWI states that the proposed transaction would allow the 
Acquired Railroads to take advantage of the administrative, financial, 
marketing, and operational support that GWI could provide, which would, 
in turn, promote the ability of the Acquired Railroads to provide safe 
and efficient service to their shippers. GWI claims that, although the 
Acquired Railroads do not connect with any of the railroads already 
controlled by GWI, the newly acquired railroads will expand the 
presence of GWI's affiliates in Arkansas.
    GWI states that no interchange commitment is being imposed as part 
of this transaction but that one of the Acquired Railroads, AKMD, has 
an existing lease agreement with UP that includes an interchange 
commitment.\6\ GWI notes that this existing commitment is part of 
AKMD's lease of several lines from UP \7\ and was negotiated as part of 
the overall economic package in the original lease transactions. 
Because GWI is acquiring control of AKMD through a stock purchase, GWI 
states that there will be no effect on AKMD's operating rights under 
the UP Lease.
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    \6\ GWI states that it does not believe that the Board's 
interchange commitment disclosure requirements are intended to apply 
to equity control transactions in which no new interchange 
commitment is being imposed as part of the transaction. Without 
waiving that argument, GWI provides, in its verified notice and a 
confidential appendix, information about the interchange commitment 
that GWI notes ``would be required'' under 49 CFR 1180.4(g)(4)(i).
    \7\ Under this lease, as supplemented (UP Lease), AKMD operates 
the North Little Rock Branch in North Little Rock, the Warren Branch 
between Dermott and Warren, and the Cypress Bend Branch between 
McGehee and Cypress Bend. See also Ark. Midland R.R.--Lease & 
Operation Exemption--Union Pac. R.R., FD 33908 (STB served Aug. 23, 
2000); Ark. Midland R.R.--Change in Operators Exemption--Line of 
Union Pac. R.R., FD 34567 (STB served Nov. 17, 2004); and Ark. 
Midland R.R.--Lease & Operation Exemption--Union Pac. R.R., FD 34714 
(STB served Aug. 30, 2005).
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    The earliest the transaction could be consummated is December 20, 
2014, the effective date of the exemption (30 days after the exemption 
was filed). The parties expect to consummate the transaction shortly 
after the exemption becomes effective, assuming all other conditions to 
closing have been satisfied by that time.
    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a rail carrier of its statutory obligation to 
protect the interests of its employees. Because the transaction 
involves the control of one or more Class III rail carriers and two 
Class II rail carriers, the transaction is subject to the labor 
protective requirements of 49 U.S.C. 11326(a) and New York Dock 
Railway--Control--Brooklyn Eastern District Terminal, 360 I.C.C. 60 
(1979).
    If the verified notice contains false or misleading information, 
the exemption is void ab initio. Petitions to revoke the exemption 
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a 
petition to revoke will not automatically stay the effectiveness of the 
exemption. Petitions to stay must be filed by December 12, 2014 (at 
least

[[Page 72245]]

seven days before the exemption becomes effective).
    An original and ten copies of all pleadings, referring to Docket 
No. FD 35877, must be filed with the Surface Transportation Board, 395 
E Street SW., Washington, DC 20423-0001. In addition, a copy of each 
pleading must be served on: Eric M. Hocky, Clark Hill PLC, One Commerce 
Square, 2005 Market Street, Suite 1000, Philadelphia, PA 19103.
    Board decisions and notices are available on our Web site at 
WWW.STB.DOT.GOV.

    Decided: December 2, 2014.

    By the Board, Rachel D. Campbell, Director, Office of 
Proceedings.
Raina S. White,
Clearance Clerk.
[FR Doc. 2014-28571 Filed 12-4-14; 8:45 am]
BILLING CODE 4915-01-P