DATE: Tuesday, April 8, 1997                TAG: 9704080263

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BLOOMBERG BUSINESS NEWS 

DATELINE: NASHVILLE                         LENGTH:   48 lines

CSX, NORFOLK SOUTHERN SAY THEY EXPECT DEAL THIS WEEK

CSX Corp. and Norfolk Southern Corp. expect to reach an agreement splitting the assets of Conrail Inc. in the next few days, the railroads' chief executives told shippers and industry executives Monday.

Norfolk Southern and CSX have been negotiating the division of Conrail's rail system in the Northeast for several weeks. Under an agreement reached between Conrail and CSX last month, CSX would buy Conrail for $10.3 billion and then sell part of the system to Norfolk Southern, which may end up with as much as 60 percent of the Philadelphia railroad.

CSX Chairman John Snow and Norfolk Southern Chairman David Goode said there remain decisions to make, such as how to divide certain facilities, which tracks should be shared and which should be owned solely by one railroad.

``Attempting to cooperate with an intense rival isn't always easy,'' Snow told the Fieldston Co.'s Railroad Market Power conference in Nashville. ``It's been made a lot easier by a shared realization that a split is inevitable.''

Goode, speaking several hours after Snow, said the companies hope to reach a pact ``in a matter of days.''

``There are a million details to be filled in, and that's what is taking us longer than I'm sure either of us wanted,'' Goode said.

Norfolk Southern and CSX plan to file a joint merger application in early June with the U.S. Surface Transportation Board, the federal agency that must approve all railroad mergers, Snow said. The STB has said it will need about 300 days to review the Conrail acquisition.

Conrail will continue to exist as a corporate entity with three divisions, Snow said. The first will consist of all tracks and facilities bought by CSX, while the second will include all assets acquired by Norfolk Southern. The third will consist of all tracks and facilities that will be shared by Norfolk Southern and CSX and will be jointly managed by both railroads.

Norfolk Southern will likely take most of Conrail's assets in states where CSX already has a large presence, such as Maryland and Michigan, Snow said. CSX may take Norfolk Southern's line from Fort Wayne, Ind., to Chicago, he said.

Both Norfolk Southern and CSX will gain access to Conrail's coveted tracks leading to shipping ports in New York and northern New Jersey, where billions of dollars of goods are imported and exported each year.

``We're going to go for business in the Northeast that Conrail never did,'' Goode said. The changes will improve economic development and job prospects in the region, he said. KEYWORDS: CONRAIL CSX NORFOLK SOUTHERN MERGER

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