The US group has already bought some BR companies, including Rail Express, the mail-by-rail system, and three trainload freight companies,which dominate the domestic rail freight business in the UK.
The announcement, which came out just before the Christmas break, may have been timed to avoid attention. Previous privatisations have attracted widespread criticism, particularly in cases where assets were being sold to foreign companies.
Wisconsin's British operating company, English Welsh and Scottish Railway, is backed by financial institutions including US investment company Berkshire Partners, and was formed to buy Rail Express, the carriers of the Royal Mail, in December 1995.
By buying Railfreight Distribution (RfD), EWS would bring together operations that the Government had intended to sell separately. The sale of the three trainload freight companies to EWS early this year attracted criticism from the Opposition. The move exposed the "fiction of rail competition," a Labour spokesman said.
The heavily subsidised RfD, which links Britain to continental Europe through the Channel Tunnel, had losses of pounds 58.6m in 1995/96 and is not expected to turn a profit for several years. BR has written off debt of pounds 300m and made additional provisions of pounds 200m against future liabilities, largely the cost of paying Eurotunnel, the Channel Tunnel operating company, for access.
RfD operates freight services to Italy, France, Spain and Germany, and runs about 160 trains a week.
The British Railways Board said on Tuesday it hoped to complete the sale by early 1997.