[030621.EN.BIZ] Growing Opposition to CN-KCS' Proposed Use of Voting Trust, CP says

 

CANADIAN Pacific Railway (CP) has announced that more than 130 stakeholders have filed statements calling on the Surface Transportation Board (STB) to reject Canadian National's (CN) proposed use of a voting trust in the proposed acquisition of Kansas City South (KCS) railroad.

This brings the total letters submitted to more than 960, including 250-plus expressing concern about CN and KCS combination, its use of a voting trust, or both, and more than 730 in support of CP-KCS.

The opposition letters - from a range of stakeholders including shippers, ports, local governments, transportation associations and other stakeholders - highlight the extensive risks the proposed CN-KCS voting trust poses to competition by reducing shipper options.

Stakeholders also expressed strong concerns over the likelihood of reduced service quality and infrastructure investments as a result of the proposed CN transaction.

These concerns echo those of the Department of Justice (DoJ), which on May 14 filed comments with the STB objecting to CN's proposed use of a voting trust on the grounds that a CN merger with KCS would pose greater risks to competition than the CP-KCS agreement.

CN's recent announcement that it intends to "divest" KCS' 70-mile line between New Orleans and Baton Rouge (but still retain full operating rights) fails to address these concerns, CP said in a statement.

"CP-KCS is the only viable Class 1 combination and has received overwhelming support across the transportation supply chain. As previously announced, CP intends to proceed with its STB application process to acquire KCS.

"The STB has already approved CP's use of a voting trust and affirmed KCS' waiver from the new rail merger rules it adopted in 2001 because a CP-KCS combination is truly end-to-end and pro-competitive. CP stands ready to reengage with KCS," the CP statement added.

Source : HKSG / Photo : Wikipedia Commons.