The rail industry and its many observers have been absorbed by the Canadian Pacific Railway’s pursuit of Norfolk Southern. Without recounting the entire story, the whole scenario (minus the regulatory stew that would be an integral part of any Class I merger) is a classic “boy meets girl” scenario with a twist.
December 7, 2015: A day that will live in infamy for anyone attempting to follow the volley of legalese and rhetoric being tossed about by Canadian Pacific and Norfolk Southern as CP attempts to marry up with NS in what may be beginning to look more and more like a shotgun wedding officiated by The Rev. Bill Ackman.*
In response to the proposed merger between Canadian Pacific Railway (CP) and Norfolk Southern Corporation (NS), U.S. Senator Dick Durbin (D-Ill.) on Dec. 14, 2015 sent a letter signed by Democratic members of the Illinois Congressional Delegation to the Surface Transportation Board (STB) urging the agency to carefully consider the potential negative impact of the proposal on Illinois’ freight network. In the letter, the legislators requested careful review of the possible effects of CP’s proposed acquisition of NS on Illinois communities and businesses, particularly those in and around Chicago.
Canadian Pacific Railway on Dec. 3, 2015 ratified a multi-year collective agreement with the 300 locomotive engineers, assistant engineers, conductors and brakemen on CP U.S. subsidiary Dakota, Minnesota & Eastern Railway (DM&E) represented by the Brotherhood of Locomotive Engineers and Trainmen (BLET).
The Canadian Pacific (CP) Holiday Train program is ready to go for its 17th year, bringing with it food, cash donations and awareness to local food banks and food shelves across North America, the railroad announced Nov. 26, 2015.
Levitation takes two forms among railroads—magnetic levitation relating to futuristic high-speed passenger transport, and stock levitation associated with bidding wars for asset control.
The day after confirming that it had made an offer to Norfolk Southern—and following NS’s tepid response—Canadian Pacific on Nov. 18, 2015 disclosed the contents of the offer letter it sent to NS chief executive Jim Squires “to clarify the details of a proposal that would result in the creation of a pro-competitive, pro-customer, coast-to-coast transportation solution.”
It’s official: Canadian Pacific on Nov. 17, 2015 sent an offer letter to Norfolk Southern proposing a merger (an acquisition, really) “that would create a transcontinental railroad with the scale and reach to deliver improved levels of service to customers and communities while enhancing competition and creating significant shareholder value.” On Nov. 18, CP, in response to NS’s tepid response to the initial offer, provided “full disclosure.”
Few obstacles bedevil railroads as has the Mississippi River. Spanning it was the nation’s first rail bridge in 1856—promptly assaulted by steamboat Effie Afton. While the bridge was repaired and more constructed, the river remains a problematic divide, separating, with few exceptions, eastern railroads from those operating in the West and producing grueling interchange bottlenecks at Chicago.
Canadian Pacific Railway has held early-stage merger talks with Norfolk Southern and is raising financing for an acquisition, according to Nov. 9, 2015 news reports citing confidential sources at both carriers. NS stock jumped 11%, the most since 2008, to $88.62 at the close of the New York Stock Exchange, while CP’s 5.7% rally to C$188.79 on the Toronto Stock Exchange was its biggest gain since 2013.
