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Rail News: M&A

Merger decision prompts reactions across the board


The Surface Transportation Board’s approval yesterday of the $31 billion merger between Canadian Pacific and Kansas City Southern prompted comments and concerns from political, community and business leaders.

The STB agreed to approve the merger under several conditions, including that it would monitor the merged Class I for seven years upon closing, which could occur as early as April 14.

Petitions for reconsideration of the board’s decision must be filed by April 4. Requests for stay must be filed by March 27, according to an STB press release.

Following are a few of the responses issued immediately after the STB announced its decision.


"We believe this merger will have a significant and positive effect on Amtrak intercity passenger-rail service," said CEO Stephen Gardner in a press release. Reasons for the national intercity passenger railroad’s support include:
• CP has committed to support Amtrak efforts to work with the Southern Rail Commission, states and other stakeholders for the first passenger trains in more than 50 years on two U.S. routes, establishing Amtrak service between New Orleans and Baton Rouge, Louisiana, and studying the potential for Amtrak service between Meridian, Mississippi, and Dallas/Fort Worth on the new CPKC line.
•  The board’s decision fulfills the objectives of President Joe Biden’s 2021 executive order on promoting competition in the American economy, which called upon the board to consider impacts on Amtrak service when reviewing proposed railroad mergers.
• CP has been a strong partner with Amtrak and the states in working collaboratively to enhance Amtrak service.

Federal lawmakers

"The merger … is great news for job creation and the economy in the Kansas City region, our state and beyond. This merger has enormous potential to promote increased competition among railroads and other transportation modes, improve commerce and access to markets, and streamline domestic and cross-border movement of goods. This is especially critical at a time when delays and backlogs continue to trouble our nation’s supply chain," said House Transportation and Infrastructure Committee Chairman Sam Graves (R-Mo.) in a press release.

"We are deeply disappointed that the Surface Transportation Board has sided with corporations over our constituents in the Chicago region.  As we have repeatedly reminded the STB, the merger will have dramatic impacts on freight traffic in Illinois that will undoubtedly impact the safety, congestion and livelihood of Illinois communities as well as disrupt Metra’s commute-rail operations that Illinoisans rely on to access jobs, education and work," said U.S. Sens. Dick Durbin and Tammy Duckworth and U.S. Reps. Raja Krishnamoorthi and Delia Ramirez, all Democrats from Illinois, in a press release.

Soy Transportation Coalition

"Some agricultural organizations and shippers have expressed disappointment in the approved acquisition. … Others have expressed optimism that the merger of the two networks will result in enhanced marketing opportunities. These shippers believe that the combined network will open up new geographic regions — particularly in Mexico and the southcentral United States — that they heretofore have not enjoyed. We will obviously wait and see if one perspective becomes reality in the months to come," said Mike Steenhoek, executive director, in an email.

U.S. Wheat Associates and National Association of Wheat Growers

"USW and NAWG believe the STB has given a green light to rail consolidation without regard for 
the consequences on agricultural shippers from lack of competition in the U.S. rail sector," the associations said in a press release. "USW and NAWG believe the STB must conduct more rigorous oversight of rail rates and service issues going forward. The STB should also aggressively pursue policies designed to inject competition, such as reciprocal switching. … We look forward to working with both the new CP-KCS railroad and the STB on addressing the disparities wheat shippers face going forward."

The Coalition to Stop CPKC

"The coalition … is extremely disappointed at the Surface Transportation Board’s decision. They blatantly ignored our concerns for the safety and quality of life of our residents and the negative consequences on economic development in our communities. … We are reviewing all our options, including legal ones," coalition officials said on Facebook.