Canadian Pacific Buys DM&E Rail for $1.48 Billion

Based in Sioux Falls, SD, the Dakota, Minnesota & Eastern Railroad (DM&E) also is comprised of IC&E Railroad, and Cedar American Rail Holdings. Today it is one of the largest regional (Class II) railroads in the US, with 1,103 miles of track located principally in South Dakota and Minnesota. It is the only carrier that connects with all seven of North America’s Class I railroads. It serves Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota, Wisconsin and Wyoming, and connects with Canadian Pacific (CP) at Minneapolis, Winona, MN and Chicago.

According to reports, DM&E has wanted to rebuild 600 miles of track across South Dakota and Minnesota and to add 250 miles of track to reach the coalfields of the Powder River Basin in Wyoming. Because such expansion would create increased rail traffic, opposition has come from communities in both states. Since DM&E has been unable to find private funding for the expansion, it sees its purchase by CP as the solution to the problem and a principal reason for the sale from perspective of Kevin Schieffer DM&E’s president and CEO.

"Canadian Pacific is our natural partner and we are very pleased with this deal, says Schieffer. “It is not only a natural operating fit; we also share a commitment to our employees, our customers and the communities we serve as well as a vision for the potential of the Powder River Basin."

CP will be adding approximately 2,500 miles of rail. "The DM&E is an excellent fit for Canadian Pacific making this a strategic end-to-end addition to our network," says Fred Green, president and CEO of CP. "The DM&E is a high-quality, growing regional railroad that complements our existing franchise. This investment presents the opportunity for future growth through further expansion of our network.”

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