Adds details from statement, background on campaign in paragraphs 3-8, byline

By Svea Herbst-Bayliss

NEW YORK, Sept 29 (Reuters) - Activist investor Ancora Holdings on Monday welcomed news that railroad operator CSX CSX.O has replaced its CEO and said it expected his successor would find a merger partner.

CSX said on Monday it replaced CEO Joe Hinrichs with Steve Angel after Ancora pressured CSX to pursue a merger or find another leader. Ancora said in August it would be ready to pursue a proxy fight to push for these changes, saying CSX stands to lose the most following news in July that Union Pacific UNP.N would acquire Norfolk Southern NSC.N for $85 billion.

The merger would create the first U.S. coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the country.

"Although Steve Angel is not a railroader by trade, his M&A pedigree and value creation record indicate his appointment is an initial step in the right direction for CSX," Ancora said.

The firm added that it expects Angel and the board to be more proactive in increasing shareholder value and identify a willing partner to merge with.

"With renewed leadership, we anticipate Mr. Angel will evaluate the full leadership team in order to restore the operational excellence that was a key tenet of CSX's past success," Ancora said in a statement.

Ancora, which held a small stake in CSX last month, said on Monday it continues to buy CSX stock and hopes it has strengthened the company's leadership. The company declined to comment.

Ancora has been especially critical of CSX's operating ratio, an industry metric for efficiency, which has climbed during Hinrichs' tenure, reflecting lower efficiency.

The investment firm also said that U.S. President Donald Trump's comments about the benefits of a transcontinental railroad and support for the planned merger of Union Pacific UNP.N and Norfolk Southern NSC.N could point to more deals in the sector.

(Reporting by Svea Herbst-Bayliss with additional reporting by Sabrina Valle; Editing by Richard Chang)

((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net/))