The Surface Transportation Board (STB) has granted authority for Watco Holdings, Inc. to acquire control of the 379.2-mile Class III Great Lakes Central Railroad, Inc., subject to certain conditions. The acquisition will allow Watco, which provides rail, transloading, terminal and port, and logistics services, to expand its control to one Class II and 44 Class IIIs across the United States.
GLC is currently owned by Federated Capital Acquisitions, Inc., a subsidiary of Federated Capital Holdings, LLC. According to Watco, the state of Michigan owns about 350 miles of GLC’s lines and GLC operates over them via “modified certificates of public convenience and necessity,” the STB reported in its Aug. 31 decision (download below). It will join Watco’s Grand Elk and Ann Arbor (AA) railroads in Michigan. Stretching from Ann Arbor (north) to Cadillac (central), Mich., with branches to Thompsonville, Traverse City, and Petoskey, GLC is the largest short line in the state and serves 15 counties. It ships a range of commodities including soybeans, corn, and other agricultural products, fertilizers, plastics, and LPG, and interchanges with CSX, Genesee & Wyoming’s Mid-Michigan Railroad and Huron & Eastern Railway, CN, and AA, which links with Norfolk Southern.
Pittsburg, Kans.-based Watco on March 6 filed a petition under 49 U.S.C. 10502, seeking an exemption from the prior approval requirements of 49 U.S.C. 11323 to acquire control of GLC by acquiring 100% of GLC’s common stock. On June 20, under the STB’s direction, Watco filed a supplement providing additional information that the Board needed to determine whether the transaction qualified for an exemption under 49 U.S.C. 10502(a).
The STB on Aug. 31 reported that its decision followed “a thorough review” of the petition and supplement. “In its filings, Watco stated its commitment to implementing service improvements and modernizing GLC’s infrastructure,” the Board said. “Specifically, Watco presented that its acquisition of control of GLC will create streamlined routing efficiencies between GLC and AA, allow GLC to gain access to Watco’s experienced marketing team, and allow Watco to invest approximately $3.7 million in GLC’s network. Watco also represented that the transaction will not reduce competitive options for shippers and committed to keeping open all currently active gateways operated by GLC and the Watco-owned AA, to which GLC connects.” No party opposed the transaction, and the State of Michigan submitted a letter in support of the acquisition, according to the STB.
In its approval decision, the Board said it “finds that the transaction satisfies the applicable statutory criteria and will not result in significant impacts on competition, subject to the imposition of a condition requiring Watco to maintain all currently active gateways on commercially competitive terms.” The decision, it noted, is subject to standard employee protective conditions.
The exemption will become effective Sept. 28, 2025. Petitions for stay must be filed by Sept. 8, 2025. Petitions to reopen must be filed by Sept. 18, 2025. STB Chairman Patrick J. Fuchs and Members Karen J. Hedlund, and Michelle A. Schultz issued the decision.
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