A federal appeals court yesterday allowed the nation's second-largest railroad operator to take control of the country's largest barge company.
The 6th Circuit Court of Appeals lifted its temporary restraining order and allowed the merger of CSX Corp., the Richmond-based railroad holding company, and American Commercial Lines.
The Interstate Commerce Commission, in a major deregulatory decision, had approved the merger in July and scheduled it for completion last Sunday.
Barge operators, coal carriers, electric utility companies and others immediately challenged the ICC's decision, arguing that the merger would reduce competition and raise coal prices.
The court had temporarily blocked the acquisition, but lifted its restraining order after a hearing yesterday.
The court ruled that the takeover would not cause irreparable harm and should proceed. But the court also ordered both sides to submit written arguments and promised to schedule the case for a full hearing.
CSX had acquired the barge lines' parent company, Texas Gas Resources Corp. in August 1983, but put American Commercial's stock in an independent voting trust pending the ICC's decision.
The railroad company said it was pleased with the ruling and would take immediate control of American Commercial's stock.
CSX, which operates 27,000 miles of railroad in 22 states, has argued that the acquisition will lower coal prices by creating a more efficient transport system.
Barge operators criticized the court's ruling. "I'm extremely disappointed because this is a landmark case which everyone agrees could, to some extent, restructure the bulk transportation industry," said Lawrence E. Scholl, a spokesman for Cincinnati-based Midland Enterprises Inc., an independent barge company.