Southern Pacific Rail Corporation

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Southern Pacific Rail Corporation
Rio Grande Industries (1968–1993)
legal form Corporation
founding October 1968
resolution October 1, 1996
Reason for dissolution Merger with Union Pacific Corporation
Seat Denver
Branch transport

The Southern Pacific Rail Corporation was an American holding company in the rail sector. Until 1993 the name of the company, founded in October 1968, is Rio Grande Industries . The company was based in Denver .

history

By the mid-1960s, the railroad sector in the United States was heavily regulated and in poor economic shape. There was a risk of nationalization of the rail network. Under these conditions, most of the major railway companies began to change their ownership structure in order to diversify into other branches of the economy, without the supervision of the Interstate Commerce Commission intervening or creating the possibility for the sale of the railway sector. The Denver and Rio Grande Western Railroad therefore founded Rio Grande Industries Inc. in October 1968 as a holding company for the railway company. At the time the company was founded, the president of the railway company Gale B. Aydelott also became president of the RGI.

In the early 1970s, the company tried to gain a foothold in the leisure sector. The company therefore owned the amusement park and roller coaster manufacturer Arrow Development in Mountain View from 1972 to 1981 and owned the Frontier Village amusement park in San José, California from 1973 to 1980 , when it was closed. The company had a profit of $ 314.5 million of $ 32.6 million.

After the deregulating Staggers Rail Act was passed , the company began looking for a merger partner in the rail sector. However, it was outbid by competitors Burlington Northern Inc. and Union Pacific Corporation . In October 1984, the Anschutz Corporation of billionaire Philip Anschutz bought the Rio Grande Industries for $ 496.5 million as part of a leveraged takeover (90 million equity, the remainder loans).

After the merger of the railway companies Atchison, Topeka and Santa Fe Railway and Southern Pacific Transportation of the Santa Fe Southern Pacific Corporation was rejected by the Interstate Commerce Commission, the Southern Pacific Transportation was offered for sale from September 1987. In addition to Kansas City Southern Industries and five other bidders, Rio Grande Industries also submitted an offer. In October 1988, the sale of the railway company, including its subsidiaries, to Rio Grande Industries for $ 1.02 billion in cash and $ 780 million in loans was completed. The fifth largest rail company in the United States was created with around 24,200 kilometers of route. Anschutz sold 29% of the Rio Grande shares to the Morgan Stanley banking house for financing . The marketing of the railway activities took place under the name Southern Pacific Lines. Due to the high debt burden caused by the acquisition (over $ 100 million in interest annually), the company began to sell the property acquired from Southern Pacific. It generated revenues of $ 1 billion in 1991 and $ 400 million in 1992.

In November 1989, Rio Grande Industries was able to acquire the railway line between St. Louis and Chicago from the bankruptcy estate of the Chicago, Missouri and Western Railroad . The operation was carried out by the newly created subsidiary SPCSL Corporation (Southern Pacific Chicago St. Louis). This was the first time that the SP network was connected to the most important US rail hub in Chicago. In 1989/1990, the company negotiated with Soo Line Corporation to purchase a 855-kilometer-long rail line between Chicago and Kansas City for $ 87 million. Due to high demands from the Chicago and Northwestern Railroad for shared use, the Rio Grande Industries resigned from the purchase in August 1990 and instead used route usage rights on the tracks of the Burlington Northern Railroad .

On May 4, 1993, the company was renamed Southern Pacific Rail Corporation. In August 1993 and February 1994 a total of 55 million shares were issued. This enabled the company to generate revenue of around $ 500 million.

In the summer of 1995, the Union Pacific Corporation announced it had acquired Southern Pacific Rail Corporation at a cost of $ 5.4 billion. After the merger was approved by the Surface Transportation Board (the Interstate Commerce Commission was dissolved on December 31, 1995), the merger took place on September 11, 1996, effective October 1, 1996.

The company was still listed as a subsidiary of Union Pacific Corporation in the annual financial statements until December 31, 2014 , but is no longer conducting its own business.

Subsidiaries

In 1994 the Southern Pacific Rail Corporation had the following subsidiaries:

  • Container Bridge Inc.
  • Rio Grande Receivables Inc.
  • SP Environmental Systems

In 1994, Southern Pacific Transportation Holding and Rio Grande Holding merged with Southern Pacific Rail Corporation, and Denver and Rio Grande Western Railroad became a subsidiary of Southern Pacific Transportation.

Corporate governance

Web links

Individual evidence

  1. ^ SEC Digest November 29, 1968: Rio Grande Industries proposes exchange plan
  2. ↑ 1983 Deseret News August 7, 1988: Coaster Wars
  3. ^ The New York Times October 2, 1984: Rio Grande Industries Merger
  4. ↑ Los Angeles Times: August 10, 1988: SP is allowed to merge with Denver Rail Line: Decision by ICC ends battle over ownership of carrier and creates 5th-biggest system in US
  5. ^ Chicago Tribune October 10, 1990: Southern Pacific wins direct line to Chicago
  6. ↑ RGI scuttles Soo deal, looks to BN trackage rights. In: Railway Age . September 1, 1990 ( online ). online ( Memento of the original dated November 4, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot / www.highbeam.com
  7. ↑ a b Railroad Retirement Board: Employer Status Determination: Southern Pacific Rail Corporation ( Memento of the original dated December 21, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.rrb.gov
  8. ↑ James B. Burns: Railroad Mergers and the Language of Unification . Greenwood Publishing Group, 1998, p. 190 ( online ).
  9. ↑ The Journal of Commerce, August 31, 1993: Mohan resigns from post at SP Rail ( Memento from October 15, 2016 in the web archive archive.today )
  10. ↑ The Journal of Commerce, October 16, 1988: Rio Grande Industries reshapes management of Southern Pacific ( Memento from September 13, 2016 in the web archive archive.today )