Canadian Pacific Seeks DOJ Review of ‘Campaign’ Against Merger
January 19, 2016 10:00AM ET | Bloomberg Government
(Bloomberg) — Canadian Pacific Railway Ltd. asked the U.S. Justice Department to look into a “collective campaign” by large railroads to block its hostile stock-and-cash bid for Norfolk Southern Corp.
The Canadian company said it sent a letter to inform the U.S. government of the “unprecedented action of major competitors organizing to block a new entrant from enhancing competition,” according to a statement Tuesday.
Railroads including Union Pacific Corp. and BNSF Railway Co. have voiced opposition to the combination, saying it would lead to a cascade of industry consolidation and could worsen rail traffic jams in Chicago. Norfolk Southern’s board of directors twice has rejected proposals from Canadian Pacific, including one that valued the target at about $27 billion in mid-December.
U.S. lawmakers and rail customers have sent letters opposing the deal to the Surface Transportation Board, the regulator that approves combinations, even though a merger process hasn’t begun.
Canadian Pacific, which operates in northern U.S. states including Illinois, Minnesota and North Dakota, said it’s confident the regulator will make an impartial analysis of any proposal and “is disappointed that others appear not to share such confidence and have resorted to collective action to ensure no merger occurs.”