CP Rail to sell portion of DM&E track to Genesee & Wyoming

Thu Jan 2, 2014 6:16pm EST

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Jan 2 (Reuters) - Canadian Pacific Railway Ltd said it would sell the western part of its Dakota, Minnesota & Eastern Railroad to U.S.-based Genesee & Wyoming Inc in a deal worth about $210 million.

Canada's second-largest railroad operator said it expected the sale to result in a writedown of $240 million, which will be recorded in its fourth quarter.

Canadian Pacific said it did not expect any material effect on future earnings.

The deal is expected to immediately add to Genesee & Wyoming's earnings per share, Canadian Pacific said in a statement.

The transaction is expected to generate about $65 million in annual revenue for Genesee & Wyoming, which owns and operates short line and regional freight railroads.

Shares of Canadian Pacific closed at $149.20 on the New York Stock Exchange, while those of Genesee & Wyoming ended at $95.43.

Canadian Pacific's Toronto-listed shares closed at C$159.37.

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