WASHINGTON — The Surface Transportation Board has reaffirmed its previous approval of a voting trust for the proposed merger of Canadian Pacific and Kansas City Southern, saying the approval granted for CP’s original bid for KCS applies to the amended notice of the companies’ intent to merge.
In May, the STB approved the planned use of a voting trust while the proposed deal undergoes regulatory review [see “STB approves Canadian Pacific request …,” Trains News Wire, May 6, 2021]. In its Thursday ruling, the board said that it was not a foregone conclusion that the prior approval remains in effect for a deal that was terminated by later revived, but that “the voting trust described in the applicants’ amended notice is substantively identical” to the one previously approved, and that the financial terms of the current deal “would not impact the operation of the voting trust.” The board said it retained jurisdiction “to order modification and correct future problems that may come to its attention.”
Thursday’s decision reaffirming approval of the voting trust is available in full here.
Yes, indeed. The contrast between a CN-KCS merger vs. a CP-KCS merger is a perfect case study in the difference between one that reduces competition (CN-KCS) vs. one that enhances it. I notice nobody has refuted that CN and KCS have many parallel routes that would be consolidated after they merge, thereby reducing options and eliminating competition for shippers on the affected routes. Conversely, the CP-KCS merger improves shippers’ ability to move goods to points along the resulting combined routes. A significant example would seem to be eliminating the need to transfer railcars between KCS and CP in Chicago.
Great news for all concerned!