Canadian National to Sell Rail Line Section to Defuse Kansas City Southern Antitrust Concerns
May 26 2021 - 07:54AM
Dow Jones News
By Jacquie McNish
Canadian National Railway Co. is offering to sell a 70-mile
stretch of its Louisiana rail network to defuse antitrust concerns
as it seeks regulatory approval for its roughly $30 billion
agreement to merge with Kansas City Southern, people familiar with
the matter said.
The two railroads plan to jointly file a motion with the U.S.
Surface Transportation Board Wednesday morning seeking approval for
a voting trust to acquire Kansas City Southern stock from its
shareholders, the people said. The STB's review of the proposed
trust is the first of a lengthy two-step regulatory process that
requires the regulator to ensure that major railroad mergers are in
the public interest and enhance competition.
Canadian National's main rail lines travel across Canada and
south into the U.S. through such major hubs as Chicago, Detroit and
New Orleans. Kansas City Southern routes extend from Illinois to
Southern Mexico. The two railroads operate nearby routes from Baton
Rouge to New Orleans that largely ship chemical products. The
railways share some customers on the route region.
Canadian National would sell the Louisiana section if its
proposed merger is approved by the STB, the people said
There have been no major railroad mergers in the U.S. for two
decades after a handful of industry combinations triggered
widespread complaints about poor service. Canadian Pacific Railway
Ltd. sought to break the deal gridlock with an agreement in March
to merge with Kansas City Southern for about $25 billion in cash
and stock, but it was outbid by its bigger competitor Canadian
National earlier this month. The STB's review of the Canadian
National and Kansas City merger is expected to last well into next
year.
(END) Dow Jones Newswires
May 26, 2021 07:41 ET (11:41 GMT)
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