STB: New merger rules apply to CN+KCS proposal

The Surface Transportation Board (STB) yesterday determined that current merger rules will apply to consideration of the proposed merger between CN and Kansas City Southern.

In response, CN officials said they welcome the board's decision, which "requires demonstrating that the combination would enhance competition."

CN requested that the STB review the company's "superior" proposal to combine with KCS under those rules because the company is confident that the combination "will create a safer, faster, cleaner and stronger railway that is ideally positioned to support the growth of an emerging consumption-based economy through better service options and customer choice," CN officials said.

CN has received “strong support” for its combination with KCS, the company added.

"We note that the STB’s procedural decision to defer consideration of our voting trust was based solely upon the fact that a merger agreement for the combination between CN and KCS was not yet available to be filed with the board," CN officials said. "We intend to promptly complete our application as the merger agreement with KCS was finalized on May 13, 2021, the same day that KCS' Board of Directors announced that our combination was superior and that it intends to terminate its merger agreement with Canadian Pacific Railway Ltd."

CN's full statement may be read here.

CP issued a statement saying that it concurs with the STB's decision to apply the new merger rules when considering the proposed transaction between CN and KCS.

"The new rules place a 'heavier burden on merger applicants to show that a major rail combination is consistent with the public interest,'" CP officials said.

CP's full statement may be read here.

Read the STB's decision here.