News
The U.S. Surface Transportation Board (STB) has announced that Canadian pacific Railway's (CN) proposed merger with Kansas City Southern (KCS) will be reviewed under its current merger rules and concluded that CN's motion for approval of its voting trust agreement is denied, without prejudice, as incomplete.
STB revised its regulations governing proposals for major rail consolidations in 2001, in response to concerns regarding continued consolidation in the rail industry. The new rules, among other things, placed a heavier burden on merger applicants to show that a major rail combination is consistent with the public interest, reflecting a shift in the STB's policy that places a greater emphasis in the public interest assessment on enhancing competition while ensuring a stable and balanced rail transportation system.
The regulatory agency also said that waiver for major transactions involving KCS has been shown not to be warranted here. The STB previously said that it would review the proposed merger of Canadian Pacific and KCS under the waiver provision it granted KCS in 2001.
Regarding the proposed merger case, the Department of Justice said in May 14 that CN's application for a voting trust to acquire Kansas City Southern should be denied, because the proposed merger “raises sufficient competition concerns.
