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CHICAGO–Canadian National Railway Co. says it has completed its acquisition of the principal lines of the Elgin, Joliet & Eastern Railway Co. in the U.S. Midwest around the Chicago area.

Montreal-based CN said yesterday the deal follows the Jan. 23 effective date of a conditional ruling approving the transaction by the U.S. Surface Transportation Board, the American rail regulator.

In September 2007, CN made a $400 million (U.S.) bid to buy the railway from U.S. Steel, which had used it to transport steel from its Chicago-area mills. The transaction was aimed at helping CN bypass the congested Chicago area by shipping goods along a 300-kilometre loop around Chicago to Memphis and other U.S. cities.

CN said yesterday it will now begin the integration of the acquired rail lines with its own assets.

Under the deal, the Transtar subsidiary of U.S. Steel will keep some rail assets, equipment, and employees that ship goods to and from the Gary Works steel operations in Indiana free credit report and score. These remaining operations will become the Gary Railway.

"With this closing, we can move forward to fulfil the promise of the EJ&E acquisition, which will help drive new efficiencies and operating improvements on CN’s network," said CN president and CEO Hunter Harrison.

The CN purchase initially drew the ire of suburban Chicago communities fearing noise, traffic and hazardous waste problems. The Surface Transportation Board made its approval subject to conditions, including a five-year period of oversight and CN covering the cost of two projects to separate highway and rail traffic.

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