WASHINGTON – The Surface Transportation Board has sailed past its deadline for issuing a decision on Canadian National’s proposed $230 million acquisition of Iowa Northern Railway.
The board was set to issue a decision by July 26, according to the procedural schedule that regulators spelled out on Feb. 29.
A board spokesman says the proposed acquisition remains under active review, but was unable to say when a decision might be issued.
CN announced in Dec. 6, 2023, that it would acquire the 218-mile Iowa Northern in a deal it said would boost rail competition, divert freight off the highway, and give Iowa shippers broader access to single-line service.
The acquisition is what’s considered a “minor” transaction. The board must approve minor transactions unless it finds a deal would harm competition.
Canadian Pacific Kansas City, Iowa Interstate, and the National Feed and Grain Association have raised concerns about the acquisition, saying it will harm competition in the Hawkeye State. CPKC in February asked the board to review the merger as a significant transaction.
The STB said CN’s acquisition was correctly determined to be a minor deal.
“The Board also reiterates that its determination in Decision No. 1 that the transaction is classified as ‘minor’ does not mean that the Board considers this proceeding to be insignificant or of little importance,” the board said. “Indeed, although the Proposed Transaction is classified as minor, the assertions made by CPKC and IAIS warrant further and careful exploration. The Board also recognizes the importance of the region being served by these rail carriers to the U.S. agriculture industry.”
Board member Robert E. Primus – who has since become the board’s chairman – dissented on that decision, citing concerns about potentially diminished rail competition and service.
The STB did, however, order CN and IANR to provide additional traffic and customer data; haulage, trackage rights, and interchange agreements; and points where shippers would see their rail options reduced from three to two.
CN has pledged to keep all current interchange options open on commercially reasonable terms.
The STB has been operating with four members – two Democrats and two Republicans – since former chairman Martin J. Oberman retired in May.
Then there is the M&B split up where nothing has been posted by the STB!