By Micah Maidenberg

 

Canadian National Railway Co. and Canadian Pacific Railway Ltd. continued crossing swords in their battle to acquire Kansas City Southern.

CN on Monday said in a letter that its bid to acquire Kansas City Southern would offer customers access to more connections across both companies' combined operations, preserve existing routes and create new shipping options.

The letter, addressed to the "KCS Community," also pledged to maintain its Kansas City U.S. headquarters, among other points.

On Friday, CP said it filed an objection to with the Surface Transportation Board, which regulates railroads in the U.S., that said CN's bid for Kansas City Southern doesn't qualify for a waiver of the agency's rules for major deals.

CP said in part that a waiver should be rejected because a CN-Kansas City Southern combination would greatly expand the gap between the newly merged firm and CP, which would then be the smallest of the major carriers.

In addition, CP in the letter said that a waiver should be rejected because of what it called overlaps between the rail networks controlled now by CN and Kansas City Southern and due to the merger's potential for a broader remaking of rail shipping in the U.S. and Canada.

"Whereas CP/KCS preserves the basic six-carrier structure of the North American rail network (two in the East, two in the West, and two in Canada with routes to the Gulf), the CN/KCS transaction would destabilize that structure," CP said.

CN said in its letter Monday that it has asked the transportation board to "apply a higher 'enhanced competition' standard of regulatory review to our proposed transaction instead of the lower pre-2001 standard CP asked for."

 

Write to Micah Maidenberg at micah.maidenberg@wsj.com

 

(END) Dow Jones Newswires

May 03, 2021 07:53 ET (11:53 GMT)

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