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7/11/2001



Rail News: Rail Industry Trends

Canadian Competition Bureau blesses CN/WC merger


Antitrust regulator Canadian Competition Bureau July 10 approved the proposed Canadian National Railway Co./Wisconsin Central Transportation Corp. merger, ruling that Surface Transportation Board should make its own decision on the combination.
STB May 9 declared the merger a minor transaction, claiming the combination complies with applicable regulations and other requirements. The CN/WC merger will not be subject to the board's new merger rules released June 11.
STB expects to issue a final written merger decision no later than Sept. 7 unless an Environmental Assessment or Environmental Impact Statement is required, or an oral argument is pending. Public comments were due June 25 with responses or rebuttal comments due July 25.
If STB approved, CN would pay $17.15 per share for WC's 46.5 million outstanding shares, or $800 million, plus pay off WC's $400 million debt — a total $1.2 billion deal. The merger deal would close in mid-October.
The merger would provide CN access to Chicago from Western Canada, enabling the Class I to provide single-line service from Wisconsin's 52 paper mills — now served by WC — to U.S. points south and west.
WC would become CN's sixth division, joining: Toronto-based Eastern Division; Winnipeg, Manitoba-based Prairie Division; Vancouver, British Columbia-based Pacific Division; Chicago-based Midwest Division; and Jackson, Miss.-based Gulf Division.
Per its April 9 merger application, CN claimed it wouldn't discontinue any WC track nor change the regional's operations. However, 260 jobs would be affected by the merger, mostly in WC's mechanical and engineering departments, and at the regional's Rosemont, Ill., headquarters.


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