Canadian National Makes Final Appeal for Acquisition of Kansas City Southern

CP filed comments with the STB on June 28 outlining why the public interest costs of CN’s proposed voting trust outweigh the non-existent benefits. With the public comment period closed, STB’s subsequent deliberations will determine the course of competition for U.S. railroading and North American commerce for the next 150 years, noted the CP.

“Hundreds of shippers, governments and other stakeholders across North America have written the Surface Transportation Board to warn about the potential public interest harms that would come from allowing CN to close into a trust,” said Keith Creel, CP president and chief executive officer. “Only by rejecting the CN voting trust can the board preserve its ability to fully review the public consequences of CN’s proposed acquisition of KCS, without the risk of any anti-competitive harms that a voting trust would set in motion.”

Importantly, the STB has already approved CP’s use of a voting trust and affirmed KCS’ waiver from the new rail-merger rules it adopted in 2001 because a CP-KCS combination is truly end-to-end, pro-competitive and the only viable Class 1 combination, noted the press release about the filing. Here is a link to the press release on July 7:…

Of the many supporters of a CP-KCS merger, none are more invested than North Dakota grain elevators, the North Dakota Grain Dealers and North Dakota members of Congress on behalf of its agriculture community and other associated groups that rely on rail to ship commodities. The entire North Dakota congressional delegation, consisting of U.S. Senators John Hoeven and Kevin Cramer and U.S. Rep. Kelly Armstrong, submitted a letter to the STB on June 28 expressing support for a combination of CP and KCS.

“CP Railway is one of two Class I freight rail providers in North Dakota, both of which provide integral market access for much of North Dakota’s commodity-driven economy. As a state rich with natural resources, including agricultural products, crude oil, and others, producers in our state rely on freight transportation to move their products to market,” noted the letter.

“Currently, shippers in North Dakota have direct access to ports in the Pacific Northwest, and thus much of Asia, through rail transportation provided by both Canadian Pacific and Burlington Northern Santa Fe (BNSF). A KCS/CP merger would create the first Class I railroad with track in Canada, Mexico and the United States, opening access to new markets for our State’s producers in Mexico, while also providing a more direct route to markets in the Southern United States.

“This in turn would increase competition and help our agricultural producers continue to provide the highest quality, lowest cost food supply in the world, while also contributing to our nation’s energy independence. Further, a KCS/CP merger would preserve the competitiveness of the rail industry among the limited number of Class I carriers operating in the U.S. In fact, the proposed merger would remain the smallest of the Class I railroads, promoting competition among railways in the region and ensure railways provide efficient service and competitive rates,” concluded the letter.

The CP said it looks forward to STB’s decision on CN’s proposal, which will “mark the next milestone in CP’s ability to present the CP/KCS alternative, which offers all the same benefits and more without any of the competitive and other costs of a CN acquisition of KCS.”

By law, the STB must make a final decision within approximately 16 months after the applications are filed.

Here is a link to all the filings by various people/groups in response to both the CN and/or CP proposals for merging with KCS.…

Here is a link to the STB Major Rail Consolidation Procedures:…

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