CN (TSX: CNR, NYSE: CNI) today announced that its proposal to
combine with Kansas City Southern (NYSE: KSU) (“KCS”) in a
cash-and-stock transaction valued at $33.7 billion continues to
receive overwhelming support from customers, suppliers, elected
officials and other stakeholders because of its extensive
pro-competitive benefits.
CN has received more than 200 additional letters
in favor of CN’s proposed combination with KCS with the Surface
Transportation Board (“STB”). This brings the total number of
support letters CN has received to more than 600 in just over a
week since its proposal was made public, far exceeding the number
of letters that Canadian Pacific Railway Limited (TSX: CP, NYSE:
CP) (“CP”) has received in over five weeks.
“CN’s customers and other stakeholders recognize
that our proposal to combine with KCS will enhance competition and
we are grateful for, but not in the least surprised by, their
overwhelming enthusiasm to see this combination brought to life.
Together, CN and KCS will create a robust network that enhances
routing choices and price competition for customers by introducing
new access and interchange options. We will create valuable new
express services that do not exist now. Many customers will get new
and better transportation choices, and importantly, no customers
will be left without multiple transportation choices. We look
forward to continuing our discussions with the KCS board so that we
can create the premier railway for the 21st century and immediately
begin delivering the many pro-competitive benefits of this
transaction.”
– JJ Ruest, president and chief executive
officer of CN
Combination of CN and KCS will Enhance
Competition and Drive Economic Growth
Together, CN and KCS would be the fifth largest
railroad by track miles in the United States, the same relative
size as a combined KCS and CP. The combination will fundamentally
enhance competition by creating a true USMCA railroad that
establishes a seamless single-line service to expand North American
trade and power economic prosperity.
More network access benefits
customers. The combination will provide each railroad’s
customers with more network access, including an additional 22
Class 1 gateways, 5 ports and 10 barge terminals for KCS customers.
More options and greater choice will allow customers to pivot to
new opportunities, develop new markets and optimize their freight
return on investment. Multiple new North-South routing options will
also introduce unmatched network resiliency in all seasonal and
adverse weather conditions, from Texas to the Midwest to
Canada.
Compelling benefits for ports and
terminal owners. CN customers will gain seamless access to
11 new bulk and intermodal international ports, while KCS customers
will gain access to 5 new international intermodal ports, driving
growth in international trade from all coasts of the continent.
Many ports in CN’s current network support the proposed combination
with KCS based on CN’s long and successful track record of
partnering with ports, including investing in their infrastructure
and participating in joint projects that increase traffic, support
port customers, and facilitate international trade.
The Alabama State Port Authority, which has
authority over the Port of Mobile, states that the merger would
enhance “end to end single owner, single-operator service resulting
in a faster, safer, and more economical rail option for our
shippers, while retaining the port’s competitive posture in the
markets we serve.”
As the Port of New Orleans and its Public Belt
Railroad summarized, “[t]his merger offers a unique opportunity to
fuel economic growth across North America while reducing freight
congestion, helping the environment, and increasing transportation
efficiencies.”
Highly complementary networks with
minimal overlap. There will be less than 65 out of 7,100
miles of overlap – less than 1% – between CN’s and KCS’ respective
networks. The CN North-South routes and the KCS North-South routes
are hundreds of miles apart and there are numerous competitive
rail, trucking and barge routes serving customers in between. CN
and KCS routes service unique markets and CN will retain all
existing route choices. In addition, CN is committed to providing
bottleneck protections and keeping all gateways open.
Any minimal post-transaction overlap can be
easily resolved and CN is committed to proposing appropriate
remedies. CN has a track record of successful mergers, integrations
and resolution of competition issues that demonstrates its ability
to make pro-competitive agreements as part of merger transactions
under review by the STB, with the acquisition of Illinois Central
in 1998 being a prime example. Notably, CN has voluntarily agreed
to have its transaction with KCS reviewed by the STB under its
current rules, evidencing its commitment to demonstrate the
pro-competitive nature of the transaction and to address any
competition concerns.
Economic benefits for local communities. CN is
committed to making significant infrastructure investments in key
communities across the new network, including Illinois, Missouri,
Michigan, Louisiana and Texas, meaning more economic opportunity
and more jobs.
Clear Path to STB Approval of Voting
Trust and Closing of Transaction
There has been an attempt by CP to distract from
the obvious fact that its proposal is weaker – both in terms of
value to KCS shareholders and the benefits it will deliver to
customers, employees and other relevant stakeholders. However, the
facts remain clear. The railroad regulatory approval condition that
is relevant to KCS shareholders is approval of the voting trust. CN
is proposing to use the identical voting trust – including the same
exact trustee – that CP has proposed, and is confident the STB will
approve both trusts and place them on a level playing field so that
KCS shareholders can realize the fair value of their
investment.
Because CN strongly believes that its proposed
combination is clearly in the public interest, it has welcomed
review under the STB’s new merger rules. CN is confident there is
no basis to treat CP and CN’s voting trust applications differently
and the current rules and old rules are irrelevant in that
decision.
STB Filing Outlining Specific Cases of CP
Misleading Claims and Why its Request for Preferential Treatment
Should be Denied
Today, CN filed with the STB a letter outlining the reasons why
CP’s attempt to disrupt the STB approval process for CN’s voting
trust are inappropriate and not based in sound legal principles.
CN’s letter to the STB also highlights numerous misleading claims
from CP and details why CP’s request for preferential treatment
around its voting trust should be denied. A full copy of that
letter appears below:
April 29, 2021
The Honorable Cynthia T. Brown Chief, Section of Administration,
Office of Proceedings Surface Transportation Board 395 E Street
S.W. Washington, DC 20423
Re: |
Finance Docket No. 36500,
Canadian Pacific Railway, Ltd., et al.—Control—Kansas City
Southern, et al.Finance Docket No. 36514, Canadian National Railway
Company et al.—Control—Kansas City Southern, et al. |
Dear Ms. Brown,
On April 27, 2021, Canadian Pacific Railway Limited (“CP”) filed
a letter in the above-referenced dockets asking the Board to adopt
different review processes and standards for two identical voting
trust agreements.1 CP claims unequal treatment is appropriate
because Canadian National Railway Company (“CN”) has voluntarily
committed to submit its application under the current merger rules.
CP also advances a number of baseless accusations about supposed
lost competition for customers in a combination of CN and Kansas
City Southern (“KCS”). Neither argument justifies this overt effort
to have the Board put its thumb on the scales of the competing
offers made by CP and CN for the acquisition of KCS. Instead, the
Board should adopt a single, efficient, fair, prompt, and uniform
review process for the two identical voting trust agreements before
it.2 Following public feedback, CN is confident the STB will agree
with us that permitting either party to close into these
plain-vanilla voting trusts in this fiercely competitive auction
setting is the proper decision in the public interest.
CP’s self-serving effort to secure preferential treatment should
fail.
First, CP’s presumption that its voting trust is now excused
from “any further review process”3 ignores what the Board said in
its April 23 decision: “[t]he review process for the Voting Trust
Agreement will be addressed in a subsequent decision.”4 The Board
was clear: there will be a review and there will be a proper
process.
CP implies that, because its KCS acquisition proposal is not
subject to the new merger rules, the Board does not have the
authority or discretion to seek public comment on and review CP’s
proposed voting trust arrangement. But the Board has been clear
that “our authority to rule on, or prevent the use of, a voting
trust . . . is inherent in our statutory authority over rail
mergers.” Major Rail Consolidation Procedures, 5 S.T.B. 539, 567
(2001). And the agency had exercised that authority in connection
with proposed Class I railroad mergers in the years before the
current merger rules were adopted. For example, in Union Pacific
Corporation, et al.—Request for Informal Opinion—Voting Trust
Agreement, Docket No. FD 32619 (Dec. 20, 1994), the full ICC
reviewed and approved the voting trust at issue, ordered a
modification to the proposed voting trust agreement, and noted that
it would retain continuing jurisdiction to correct any future
problems with the trust and even dissolve it.5The agency thus has a
history of engaging in the same type of public interest analysis
for particular Class I mergers that was later codified for all
proposed Class I mergers in the new merger rules.6 There is no
reason why CP’s proposed voting trust cannot and should not be
reviewed by the Board in the same manner, regardless of whether the
current merger rules or the old merger rules apply to a CP-KCS
combination. Any other conclusion would mean a party could close a
transaction even if the Board believed the proposed voting trust
was not in the public interest.
To be sure, the public interest inquiry for a voting trust is
different from the standard for final approval. As the Board said
in Major Rail Consolidation Procedures, the central public interest
consideration in review of a voting trust is potential harm to the
applicants from a sale out of trust.7 That risk of harm is not
present here, where there is significant interest in the KCS
franchise from two railroads and private equity firms.8 And it is
plainly in the public interest to place railroads on even ground
with potential financial acquirers and to reduce the longer
regulatory review process for the benefit of KCS and its
shareholders while allowing the Board the opportunity to consider
the merits of a proposed combination of either CN-KCS or CP-KCS.9
CN has explained why its use of a voting trust agreement would be
in the public interest, and CP can and should be required to do the
same.
Second, CP asserts that the Board should adopt different review
processes because “different factual contexts demand different
treatment.” Yet the factual contexts of the voting trust agreements
are the same. The voting trust agreement that CN has proposed to
use if KCS partners with CN is exactly the same in every respect as
the voting trust agreement that CP negotiated with KCS—including
using the very same trustee.
CP’s suggestion that voting trust review should depend upon
whether the transaction might ultimately be approved is meritless.
Voting trust review has nothing at all to do with the conditions
the Board may impose in its ultimate transaction review or whether
the Board would approve the transaction. Nor could it. Neither CN
nor CP has submitted an application for approval of a transaction,
let alone one that has received public comment and been analyzed by
the Board. The Board cannot prejudge the merits of either a CP-KCS
or a CN-KCS transaction in its review of the identical voting
trusts. Yet that is exactly what CP is trying to get the Board to
do.
Third, certainly the Board cannot tilt the playing field on the
basis of accusations of lost competition that are unsubstantiated,
unsupported, and contrary to an outpouring of stakeholder support.
The CN-KCS combination is an end-to-end transaction with limited
overlap—amounting to approximately 1% of their total network and a
very limited number of customers that are served only by CN and KCS
(so called 2-to-1 customers).
CP apparently used the confidential Carload Waybill Sample that
the Board authorized for use in preparing its application in FD
36500 to prepare two maps criticizing the potential CN-KCS
combination proposed in this docket.10 These maps are not supported
by expert testimony, any analysis, or supporting workpapers that
could allow CN or the Board to analyze fully CP’s assertions. But
CN does not need to see the backup to know that CP is either
seriously misunderstanding or deliberately misstating the
facts.
Headline suggestions of “[o]ver 340 [s]hippers” harmed are a
massive overstatement.11 For example, CP claims to have located 152
of these shipper facilities in the St. Louis/Springfield area. But
there are no 2-1 CN-KCS facilities in St. Louis. What CP appears to
be referencing is the significant number of St. Louis-area
customers who are served by the Terminal Railroad Association of
St. Louis (“TRRA”), a switching railroad with connections to six
Class I railroads: BNSF, CN, CSX, KCS, NS, and UP. All of CN’s
traffic to St. Louis is handled through the TRRA. Suggesting that a
TRRA-served customer could suffer meaningful competitive harm by
having access to five Class I railroads rather than six is
nonsense. Moreover, even if a particular TRRA-served facility
currently ships via both CN and KCS, that would not mean that CN
and KCS could both serve the same flows of traffic to or from that
facility. CN reaches these points from the east, and KCS reaches
them from the west. The same could be said for alleged overlaps in
Omaha/Council Bluffs, which CN and KCS reach via different
directions. To say that customers in these locations face
competitive harm is as nonsensical as saying that Kansas City area
customers would lose competition from a CP-KSC merger because they
formerly could ship northbound via CP or southbound via KCS.
Indeed, customers from many areas, including those that CP claims
might suffer competitive harm, have already come out to support a
CN-KCS transaction.12
CN acknowledges that a small number of customers between Baton
Rouge and New Orleans currently have the ability to be served by CN
and KCS, and CN has committed to proposing a competitive solution
for those customers.13 This solution will be informed by CN’s
ongoing discussions with those customers. Even if CN could not
reach agreement with those customers, CN commits to propose an
appropriate remedy to address 2-to-1 customers, including haulage,
trackage rights, or even divestiture.
At the heart of CP’s allegations, however, are false claims that
customers from Canada to Mexico will suffer serious harm from lost
routing options. In Figure 2, CP claims to show a loss of “rail
choice” because CN’s north-south line between Chicago and New
Orleans is roughly parallel to the KCS north-south line between
Kansas City and Houston.14 CP ignores both the hundreds of miles
between these two routes and the fact that those lines run parallel
to multiple other north-south transportation corridors. These
include rail routes from four other Class I carriers (several of
whom have multiple north-south routes in Mid-America); water routes
on the Mississippi, and truck routes on interstates like I-35 and
I-55. The map on the next page illustrates the wealth of routing
options available.
Moreover, CP ignores CN’s public commitment to keep
all existing gateways open on commercially reasonable terms.16 The
value proposition of a CN-KCS combination is about growing trade,
competing better with trucks, and increasing customer choice—not
about limiting competitive options. The very fact that hundreds of
customers immediately expressed strong support for the CN-KCS
combination is powerful evidence of the potential public benefits
of this combination.17 KCS and its shareholders deserve an
opportunity to consider CN’s superior proposal and, if KCS chooses
to partner with CN, KCS and CN deserve the opportunity to
demonstrate the public interest of a CN-KCS combination on the
merits.
CP knows all of this yet continues to make these assertions that
are exaggerated, mischaracterized and not representative of the
full story. And the reason it is doing so is clear. CP knows that
the CN-KCS transaction is better for customers, employees,
communities and the North American economy as a whole. It knows
that it cannot compete with the CN-KCS transaction from a value
standpoint, and it cannot compete with the CN-KCS transaction from
a pro-competitive standpoint.
CN voluntarily committed to meeting the enhanced competition
standard of the new rules.18 That means a commitment to address any
facilities served only by CN and KCS, as CN has committed to do. It
means a commitment to keep gateways open on commercially reasonable
terms, as CN has committed to do. It also means a commitment to
propose solutions to customers to address any other demonstrated
competition concerns. And if agreement is not achieved with such
customers, it means a commitment to implementing appropriate
conditions from the Board to enhance competition, using the current
merger rules.
CP is engaged in a completely transparent attempt to have the
Board adopt one standard of review for its voting trust because its
transaction with KCS would be reviewed under the old rules, and a
different standard of review for CN’s voting trust because CN
voluntarily agreed to have its transaction with KCS reviewed under
the new rules. In fact, the Board should feel comfortable approving
the CN voting trust because of the foregoing commitments that CN
has made that will ensure the pro-competitive aspects of the CN-KCS
transaction.
The Board has a well-earned reputation as a neutral arbiter.
There is no plausible harm to CP from the Board examining the
identical voting trusts under the same standards and schedule, and
ruling on both by May 31, 2021. Approving both voting trusts would
offer KCS and its shareholders the ability to make an informed
choice between the two potential transactions on a level playing
field. And approval would make possible the massive benefits that
will flow from better service, more shipping options, and
streamlined service from Mexico, to the United States, to
Canada.
Sincerely,
/s/ Raymond A. Atkins, Ph.D.
cc: Parties of Record in FD 36500; Parties of Record in FD
36514
For more information on CN’s superior proposal
to acquire KCS, please visit www.ConnectedContinent.com.
About CN
CN is a world-class transportation leader and
trade-enabler. Essential to the economy, to the customers, and to
the communities it serves, CN safely transports more than 300
million tons of natural resources, manufactured products, and
finished goods throughout North America every year. As the only
railroad connecting Canada’s Eastern and Western coasts with the
U.S. South through a 19,500-mile rail network, CN and its
affiliates have been contributing to community prosperity and
sustainable trade since 1919. CN is committed to programs
supporting social responsibility and environmental stewardship.
Forward Looking Statements
Certain statements included in this news release
constitute “forward-looking statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
under Canadian securities laws, including statements based on
management’s assessment and assumptions and publicly available
information with respect to KCS, regarding the proposed transaction
between CN and KCS, the expected benefits of the proposed
transaction and future opportunities for the combined company. By
their nature, forward-looking statements involve risks,
uncertainties and assumptions. CN cautions that its assumptions may
not materialize and that current economic conditions render such
assumptions, although reasonable at the time they were made,
subject to greater uncertainty. Forward-looking statements may be
identified by the use of terminology such as “believes,” “expects,”
“anticipates,” “assumes,” “outlook,” “plans,” “targets,” or other
similar words.
Forward-looking statements are not guarantees of
future performance and involve risks, uncertainties and other
factors which may cause actual results, performance or achievements
of CN, or the combined company, to be materially different from the
outlook or any future results, performance or achievements implied
by such statements. Accordingly, readers are advised not to place
undue reliance on forward-looking statements. Important risk
factors that could affect the forward-looking statements in this
news release include, but are not limited to: the outcome of any
possible transaction between CN and KCS, including the possibility
that a transaction will not be agreed to or that the terms of any
definitive agreement will be materially different from those
described; the parties’ ability to consummate the proposed
transaction; the conditions to the completion of the proposed
transaction; that the regulatory approvals required for the
proposed transaction may not be obtained on the terms expected or
on the anticipated schedule or at all; CN’s indebtedness, including
the substantial indebtedness CN expects to incur and assume in
connection with the proposed transaction and the need to generate
sufficient cash flows to service and repay such debt; CN’s ability
to meet expectations regarding the timing, completion and
accounting and tax treatments of the proposed transaction; the
possibility that CN may be unable to achieve expected synergies and
operating efficiencies within the expected time-frames or at all
and to successfully integrate KCS’ operations with those of CN;
that such integration may be more difficult, time-consuming or
costly than expected; that operating costs, customer loss and
business disruption (including, without limitation, difficulties in
maintaining relationships with employees, customers or suppliers)
may be greater than expected following the proposed transaction or
the public announcement of the proposed transaction; the retention
of certain key employees of KCS may be difficult; the duration and
effects of the COVID-19 pandemic, general economic and business
conditions, particularly in the context of the COVID-19 pandemic;
industry competition; inflation, currency and interest rate
fluctuations; changes in fuel prices; legislative and/or regulatory
developments; compliance with environmental laws and regulations;
actions by regulators; the adverse impact of any termination or
revocation by the Mexican government of KCS de México, S.A. de
C.V.’s Concession; increases in maintenance and operating costs;
security threats; reliance on technology and related cybersecurity
risk; trade restrictions or other changes to international trade
arrangements; transportation of hazardous materials; various events
which could disrupt operations, including illegal blockades of rail
networks, and natural events such as severe weather, droughts,
fires, floods and earthquakes; climate change; labor negotiations
and disruptions; environmental claims; uncertainties of
investigations, proceedings or other types of claims and
litigation; risks and liabilities arising from derailments; timing
and completion of capital programs; and other risks detailed from
time to time in reports filed by CN with securities regulators in
Canada and the United States. Reference should also be made to
Management’s Discussion and Analysis in CN’s annual and interim
reports, Annual Information Form and Form 40-F, filed with Canadian
and U.S. securities regulators and available on CN’s website, for a
description of major risk factors relating to CN.
Forward-looking statements reflect information
as of the date on which they are made. CN assumes no obligation to
update or revise forward-looking statements to reflect future
events, changes in circumstances, or changes in beliefs, unless
required by applicable securities laws. In the event CN does update
any forward-looking statement, no inference should be made that CN
will make additional updates with respect to that statement,
related matters, or any other forward-looking statement.
No Offer or SolicitationThis
news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to Find
ItThis news release relates to a proposal which CN has
made for an acquisition of KCS. In furtherance of this proposal and
subject to future developments, CN (and, if a negotiated
transaction is agreed, KCS) may file one or more registration
statements, proxy statements, tender offer statements or other
documents with the U.S. Securities and Exchange Commission (“SEC”)
or applicable securities regulators in Canada. This news release is
not a substitute for any proxy statement, registration statement,
tender offer statement, prospectus or other document CN and/or KCS
may file with the SEC or applicable securities regulators in Canada
in connection with the proposed transactions.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), TENDER OFFER
STATEMENT, PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC OR APPLICABLE SECURITIES REGULATORS IN CANADA CAREFULLY IN
THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED
TRANSACTIONS. Any definitive proxy statement(s),
registration statement or prospectus(es) and other documents filed
by CN and KCS (if and when available) will be mailed to
stockholders of CN and/or KCS, as applicable. Investors and
security holders will be able to obtain copies of these documents
(if and when available) and other documents filed with the SEC and
applicable securities regulators in Canada by CN free of charge
through at www.sec.gov and www.sedar.com. Copies of the documents
filed by CN (if and when available) will also be made available
free of charge by accessing CN’s website at www.CN.ca.
ParticipantsThis news release
is neither a solicitation of a proxy nor a substitute for any proxy
statement or other filings that may be made with the SEC and
applicable securities regulators in Canada. Nonetheless, CN and its
directors and executive officers and other members of management
and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed transactions. Information
about CN’s executive officers and directors is available in its
2021 Management Information Circular, dated March 9, 2021, as well
as its 2020 Annual Report on Form 40-F filed with the SEC on
February 1, 2021, in each case available on its website at
www.CN.ca/investors/ and at www.sec.gov and www.sedar.com.
Additional information regarding the interests of such potential
participants will be included in one or more registration
statements, proxy statements, tender offer statements or other
documents filed with the SEC and applicable securities regulators
in Canada if and when they become available. These documents (if
and when available) may be obtained free of charge from the SEC’s
website at www.sec.gov and www.sedar.com, as applicable.
Contacts:
MediaCanadaMathieu GaudreaultCN
Media Relations & Public Affairs(514)
249-4735Mathieu.Gaudreault@cn.ca Longview Communications &
Public AffairsMartin Cej (403) 512-5730 mcej@longviewcomms.ca
United StatesBrunswick GroupJonathan Doorley / Rebecca Kral(917)
459-0419 / (917)
818-9002jdoorley@brunswickgroup.comrkral@brunswickgroup.com |
Investment CommunityPaul
ButcherVice-PresidentInvestor Relations(514)
399-0052investor.relations@cn.ca |
____________________________________________________________________
1 CP April 27, 2021 Letter, CP-2, STB Finance Docket No. 36514
(“April 27 CP Letter”).2 As CN indicated in its Motion for Approval
of Voting Trust Agreement, it will not object to any public review
process the Board adopts in FD 36500. If the Board is still
considering an appropriate schedule, however, CN suggests a 10-day
schedule for comments, with 5 days for reply. Such a schedule would
leave the Board with ample time to issue a decision before May 31.3
April 27 CP Letter at 7-8.4 Canadian Pacific Railway, Ltd., et
al.—Control—Kansas City Southern et al., STB Finance Docket No.
36500, Decision No. 4, at 2 n.2 (Apr. 23, 2021). 5 Id.
at 3, 5-6 (“We have scrutinized this proposed voting trust and, as
revised here, find nothing inherent in its provisions that would
result in the kind of premature, unauthorized control prohibited by
the ICA. . . . However, we will order on further revision to the
voting trust agreement. . . . For all of these reasons, we conclude
. . . that the voting trust should be approved conditioned upon the
further modification discussed above.”). See also Santa Fe Southern
Pacific Corp.—Control—Southern Pacific Transportation Company, 2
I.C.C. 2d 709, 715 (1986); Santa Fe Southern Pacific
Corporation—Control—Southern Pacific Transportation Company, Docket
No. FD 30400 (ICC served Dec. 14, 1983 and Dec. 23, 1983).6 See,
e.g., Santa Fe Southern Pacific Corp.—Control—Southern Pacific
Transportation Company, 2 I.C.C. 2d 709, 715 (1986); Santa Fe
Southern Pacific Corporation—Control—Southern Pacific
Transportation Company, Docket No. FD 30400 (ICC served Dec. 14,
1983 and Dec. 23, 1983); Union Pacific Corporation, et al.—Request
for Informal Opinion—Voting Trust Agreement, Docket No. FD 32619
(ICC served Jan. 6, 1995) (decision on request for stay pending
appeal).7 See 5 S.T.B. at 567 (2001). CP’s citation of a
53-year-old decision stating that the ICC had authority to
“determin[e] the factors relevant to the public interest” is beside
the point. April 27 CP Letter at 2 n.3. The Board has already
identified the relevant public interest considerations in Major
Rail Consolidation Procedures—the potential for harm to “the
financial integrity of the applicant carriers.” 5 S.T.B. at 567.8
See Motion for Approval of Voting Trust Agreement at 10-11, CN-6,
Finance Docket No. 36514 (filed Apr. 26, 2021).9 See id. at 8-10.10
See Waybill Request Decision, WB21-24 (Mar. 25, 2021) (granting
request for confidential Carload Waybill Sample access in FD 36500
based on representations in request letter that data would be
needed “to prepare the various analyses and evidence required by 49
C.F.R. Part 1180 in support of the[] planned Application”).11 See
April 27 CP Letter at 4 & fig.1.12 See, e.g., Alabama State
Port Authority Support Letter, Finance Docket No. 36500 (filed Apr.
23, 2021) (“[T]he Alabama State Port Authority strongly supports
CN’s proposed acquisition of KCS, and we hope to see the
acquisition successfully completed.”).13 See CN Letter at 3,
Finance Docket No. 36500 (filed Apr. 23, 2021) (“CN is committed to
working with customers that are dual-served by CN and KCS to ensure
that they would not become sole-served as a result of a CN-KCS
transaction. . . . If KCS chooses to partner with CN, CN will
propose effective solutions, working closely with these customers
to ensure that no customer will become sole served as a result of
the transaction.”).14 See April 27 CP Letter at 6 & fig.2.15
This map only illustrates major North-South routes via rail, barge,
or truck in Mid-America, and does not highlight the numerous
East-West routes.16 See CN Letter at 3, Finance Docket No. 36500
(filed Apr. 23, 2021) (“CN would commit to keep all existing
gateways between KCS and other rail carriers open on commercially
reasonable terms, including the Kansas City gateway between KCS and
CP.”)17 See Initial Submission of 409 Statements Supporting
Proposed Transaction, CN-4, Canadian National et al.—Control—Kansas
City Southern et al., Finance Docket No. 36514 (filed Apr. 26,
2021).18 CP’s claim that CN did not ask for a waiver because it
knew it could not qualify for one is nonsense. The waiver, and the
rationale in the Board’s April 23 decision for keeping the waiver,
was predicated on the nature of KCS, not the nature of CP, and the
Board’s April 23 rationale could just as easily apply to a CN-KCS
transaction. CN committed to the new rules because that is what our
customers wanted, and because CN welcomes the opportunity to
demonstrate the pro-competitive benefits of the transaction and to
provide the more detailed information required by the new rules,
including a comprehensive service assurance plan and a
demonstration of enhanced competition.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/bc3c07cf-f283-4553-a4e2-fca4f18e9e20
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Canadian National Railway (TSX:CNR)
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From Mar 2023 to Mar 2024