Canadian National, Canada Pacific Continue Positioning for Kansas City Southern
By Micah Maidenberg
Canadian National Railway Co. and Canadian Pacific Railway Ltd.
continued crossing swords in their battle to acquire Kansas City
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 firstname.lastname@example.org
(END) Dow Jones Newswires
May 03, 2021 07:53 ET (11:53 GMT)
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