KCS Calls CN Bid ‘Superior’ as the US DOJ Says CN-KCS Merger Poses Greater Risk to Competition

A CP-KCS combination would create a new Class 1 railroad that would still be the smallest of the six, whereas a CN-KCS combination would leave Canadian Pacific significantly smaller than the new CN-KCS entity.

The United States Department of Justice has now weighed in on these merger talks, stating that the Canadian National bid for KCS posed a greater risk to competition. In a filing with the Surface Transportation Board, the DOJ that although it had not yet formed a final position on a CN-KCS combination, the “proposed acquisition raises sufficient competition concerns on first blush that the CN should be prohibited from using a voting trust”. The filing went on to say that “CN’s proposed acquisition of KCS appears to pose greater risks to competition than the risks posed by a CP-KCS merger.

The DOJ has taken issue generally with the STB’s policy around the use of voting trusts, stating that “even two railroads that are ‘end to end’ – i.e. that do not compete to offer parallel single-line service between the same origin and destination pairs – may still compete with one another in important ways”. In the case of CN, there are some parallel routes, the filing notes, such as between Baton Rouge and New Orleans.
source= https://railway-news.com/kcs-calls-cn-bid-superior-as-the-us-doj-says-cn-kcs-merger-poses-greater-risk-to-competition/

Top