WASHINGTON — A decision appears to be at hand in the Canadian Pacific-Kansas City Southern merger.
The Surface Transportation Board has announced a Wednesday press conference at 11 a.m. EDT in which board Chairman Martin Oberman will deliver remarks “regarding the agency’s decision on the proposed acquisition” of KCS by CP, followed by a Q&A session with the media.
The event will be live streamed on the STB YouTube channel.
The announcement does not specifically say the board has reached a decision — and a number of legislators have called for the board to delay its ruling in the light of safety concerns raised by the Feb. 3 derailment and hazardous-material spill in East Palestine, Ohio. But statutory requirements make it extremely likely that a decision will, in fact, be announced.
The original statutory deadline was Jan. 19, but a decision was delayed past that date by the release of the final Environmental Impact Statement [see “Environmental review holding up …,” Trains News Wire, Jan. 19, 2023]. That document was published in the Federal Register Feb. 5, starting a 30-day clock before the board could release its final decision.
The proposed $31.6 billion CP-KCS deal would bring together the two smallest Class I railroads and create a 19,200-mile system, to be known as Canadian Pacific Kansas City, linking Canada, the U.S., and Mexico. The board accepted the railroads’ merger application in late 2021 [see “Federal regulators formally accept …,” Trains News Wire, Nov. 23, 2021].
Other Class I railroads have asked for a series of conditions to be attached to any merger approval. Most notably, Canadian National — which lost out to CP in its own bid to merge with KCS — has asked that the merged railroad be forced to sell KCS’s line connecting Springfield, Ill., to Kansas City and St. Louis, Mo., to form its own route linking Kansas City, Chicago, Detroit, and eastern Canada.
Among those who have urged the board to turn down, or at least more closely scrutinize, the merger are a group of Chicago suburbs, Chicago commuter rail operator Metra, and, most recently, U.S. Sen. Elizabeth Warren (D-Mass.), who said it was not in the public interest [see “Massachusetts senator calls on STB to reject …,” News Wire, March 6, 2023]. The U.S. Justice Department has also said it has “serious concerns” about the merger’s competitive implications [see “Justice Department chimes in, again …,” News Wire, Jan. 25, 2023].
The CP+KCS merger would be very similar in breadth and precedence to the two country/three coastline reach of Canadian National except of course KCS has a strong operation in Mexico. Hopefully STB gives this combination a green light.
I’ve said it here and I’ll say it again. It will be a disgrace if STB approves CP+KCS without forcing CP to convey the train dispatching of the Metra-owned territory to Metra. There is no precedent for a foreign national freight railroad to have dispatching rights over the territory of an American taxpayer-supported commuter/regional railroad that actually owns the territory and is responsible for all engineering functions. This situation has been around a while. It goes back to the Milwaukee Road bankruptcy and Soo Line winning the bidding war with C&NW and GTW for what of the Milw was to be retained. That happened in the 1980s. Elizabeth Warren has no skin in this game even though she thinks she does. If I put a railroad map in front of her I doubt she could trace the territories of either CP or KCS. But the Congresscritters in the Metra Milw North and Milw West service areas sure as hell do have skin in this game. But do they even know about the dispatching situation? Have they even ridden except for a photo op? I think we all know the answers.
I hope it passes and the merger goes through. I understand the tradition of names and how society seems to like shortening them down to letters. Kentucky Fried Chicken is now just KFC, Taco Bell is now just…..oh never mind 🙂
I am sure they will do what the others have done. Come up with a corproate name and then spend dough on a bunch of legacy painted engines to give the warm and fuzzies.
They should change their name to North America railroad
Atlantic, Pacific & Gulf. Though there was probably a 19th Century company that never spiked a rail that already used it.
Just can’t resist bringing YOUR politics into an otherwise focused thread.
Canadian Pacific should retain its original name after the merger as Union Pacific had done during the acquisition of Southern Pacific and Chicago & Northwestern.
The name “Canadian Pacific Railway” spans three centuries. To add “Kansas City” forms linguistic clutter as was “Illinois Central Gulf” after the Illinois Central Railroad acquired the Gulf Mobile & Ohio.
Agree with you, but neither you nor I has a say in the matter. CPKC was agreed so as to the KCS on board.
Canadian Pacific is only 142 yeras old..
I wonder if they ever considered “Canadian Southern.” That seems to describe the resultant rail system more thoroughly. Yes, there once was a “Canada Southern” railroad, but there was also a Norfolk Southern before the NS/Southern Railway merger.
Definitely agree. CN played around unofficially with CN/IC in the US for awhile after their merger in the late 90’s, but kept the CN name and image. Canadian Pacific is too classy of a name and image to lose.
It will be an interesting railroad. Serving the Atlantic Ocean at St John, and Searsport, Me, The Gulf of Mexico at Beaumont and Houston, the Pacific in Vancouver, BC, and I thought in the south of Mexico.
Canadian points and the Midwest from North Dakota to Missouri, and east to Illinois. And lest I forget Albany, NY.
NS also has a busy coal dock at Sandusky, OH. 9 months of the year.
Having an extremely low opinion of politicians, I hope the STB ignores those who are squawking about this merger. They’ve had plenty of time to get their snouts in the trough and need to understand that time has passed. I’m hoping that CN and the various NIMBYs are also ignored here, but that’s just my prejudice showing. I’m looking forward to seeing the implementation of this new railroad. Will it be smooth or a big mess like too many mergers have been?
It will be a mess. The Canadian way of doing things and the US way of doing things are too different, from the Governments, the trade unions and the operation side of things. And what about IT? The big key will be if they can meld the two companies computer systems or if they will struggle a long with what they have until they are finally forced to come to grips with the invoicing mess that they will have. The Top company (CP) will try to do it their way and the KCS people with resist assimilation, irregardless of the fact that Keith Creel will be yelling at the top of his lungs, RESISTANCE IS FUTILE!!!
My opinion of Democrat politicians drops by the day. My fear is that the Massachusetts senator, who is 1/1,024th fraction of a human being, will get this merger delayed.