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CP says if CN's KCS bid succeeds, shippers' choice will be slashed

TERSE distain was how Canadian Pacific Railway (CP) greeted Canadian National Railway's (CN) surprise and unsolicited US$65 billion bid for the Kansas City Southern (KCS) Railway that topped CP's earlier offer of $60 billion

22 April 2021 - 19:00
TERSE distain was how Canadian Pacific Railway (CP) greeted Canadian National Railway's (CN) surprise and unsolicited US$65 billion bid for the Kansas City Southern (KCS) Railway that topped CP's earlier offer of $60 billion.

'CN's proposal is illusory and inferior to the proposed CP/KCS transaction, and that a CN/KCS transaction would be contrary to the public interest given its adverse impacts on competition,' said CP lawyer David Meyer, in a letter addressing the regulatory US Surface Transportation Board.



'Canadian Pacific respectfully suggests that the board should see things the same way: the only combination involving KCS that is in the public interest is the one that Canadian Pacific has proposed, and which has already garnered support from over 400 shippers and other stakeholders,' said Mr Meyer.



'A CN/KCS combination would reduce competitive options for countless shippers. A CN/KCS combination would extinguish competition.



Mr Meyer pointed out that CN and KCS serve many shippers in common; they operate parallel lines between Baton Rouge and New Orleans; they both serve grain and other shippers in eastern Nebraska and western Iowa; they both reach the port of Mobile, Alabama; they both serve shippers in Springfield, Illinois; East St Louis, Illinois; Jackson, Mississippi; and their lines are largely parallel throughout eastern Mississippi.



'Even more fundamentally, between the Upper Midwest and Gulf Coast - in corridors like Twin Cities to New Orleans - a CN/KCS combination would reduce the number of independent routing options from four to three,' Mr Meyer said.



'Accordingly, Canadian Pacific urges the board to promptly confirm that consideration of the uniquely straightforward and beneficial CP/KCS transaction may proceed under the pre-2001 rules and that Canadian Pacific's voting trust proposal requires no further board approval,' said Mr Meyer.


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