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7/2/2004



Rail News: M&A

Canadian competition bureau blesses CN's BC Rail deal



By mid-July, Canadian National Railway Co. expects to wrap up its acquisition of BC Rail Ltd. The Class I recently reached a consent agreement with Canada's Competition Bureau, which requires CN to share merger efficiencies with BC Rail shippers, establish an "Open Gateway Rate and Service Commitment" to ensure Vancouver gateway shippers have competitive transportation options, and maintain competitive rates and service for Peace River region grain shippers.

Vancouver gateway shippers will be able to choose to route traffic on CN or BC Rail, but CN negotiated agreements with Canadian Pacific Railway, Burlington Northern Santa Fe and Union Pacific Railroad to ensure shippers have other routing options.

"We firmly believe CN's network and service advantages will strengthen the competitiveness of BC Rail shippers and help position northern British Columbia for new economic growth," said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement.

In November, the competition bureau began reviewing CN's and the province of British Columbia's "BC Rail Investment Partnership" under which the Class I agreed to pay the province $768 million in cash to acquire the 1,400-mile regional’s outstanding shares and the right to operate over BC Rail’s roadbed under a long-term lease.

The regional's rail bed will remain in public hands, with CN assuming responsibility for rail transportation and infrastructure maintenance. No other approvals are required before completing the deal, CN officials said.


Contact Progressive Railroading editorial staff.

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