Canadian Pacific Kansas City (CPKC) chief executive Keith Creel has criticised the revised merger application submitted by Union Pacific and Norfolk Southern to the Surface Transportation Board, arguing that the proposal does not meet regulatory expectations and could increase risks across the US freight rail sector.
In a statement, Creel said the revised application, refiled on 30 April, failed to address fundamental concerns surrounding the proposed merger. He said the combined company would control close to half of US freight rail traffic and argued that such concentration could affect competition, supply chains and rail customers.
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Creel also questioned whether the applicants had complied with specific requirements set out by the Surface Transportation Board under its 2001 major merger rules. He referred to comments filed by CPKC on 8 May, which argued that the revised submission did not appear to include a detailed market impact analysis covering projected rail traffic shares across commodities and corridors.
He argued that this raises questions about whether Union Pacific had overlooked regulatory instructions or chosen not to disclose certain information.
CPKC chief executive Keith Creel said:
Having taken nearly four months to refile their application, longer than it took for them to prepare the initial filing, UP and NS’ new application doesn’t change the underlying reality that this mega-merger is unnecessary and falls well short of meeting the high benchmark set out in the STB’s updated 2001 major merger rules.
The proposed merger between Union Pacific and Norfolk Southern would create one of the largest freight rail operators in North America. The application remains subject to review by the Surface Transportation Board, which oversees major rail transactions in the United States.
Creel said CPKC expects the regulator to carry out a detailed assessment if the revised application is accepted for consideration. He also encouraged rail customers and other stakeholders to participate in the review process by filing notices of intent and submitting comments to the board.