The U.S. sold its 85% Conrail stake in 1987, the largest industrial IPO in U.S. history.

Penn Central's 1970 bankruptcy was the largest in U.S. history, and by 1976 Congress merged six failed northeastern railroads into Conrail, with the government owning 85% and employees 15%. Despite billions in federal help, Conrail initially ran massive losses.

Under new leadership and after legislative reforms, Conrail turned profitable by 1981. The government weighed selling to Norfolk Southern or CSX, but the rail-to-rail sale stalled in Congress as anticompetitive and was opposed by management; the 1986 Conrail Privatization Act cleared the way for a public offering instead.

On March 26, 1987, Goldman Sachs led the IPO at $28 a share. The government's 85% stake sold for $1.65 billion, and with Conrail's cash reserves the Treasury received about $1.875 billion — the largest initial public offering of a U.S. industrial company in history.

The government sold its 85% stake at $28 a share, raising $1.65 billion — about $1.9 billion with Conrail's cash — in the largest U.S. industrial IPO of its time.

Profitability from 1981 made a sale credible.

A public offering sidestepped the antitrust fight a rail-to-rail sale would have provoked.

Underwriters' demand let the deal price above the private-bid range.

Employee ownership of 15% aligned workers with the new public company.

When a rescue target turns profitable, a public offering can beat a private sale: it priced above the bids on the table and returned the asset to the market.

Conrail stayed independent and profitable for a decade until Norfolk Southern and CSX jointly acquired it in 1997 for $10.5 billion, a return many times the 1987 flotation value and a landmark of U.S. privatization.