Rail Shippers Largely Oppose Canadian Pacific-Norfolk Southern Merger

Many rail shippers don’t support Canadian Pacific’s proposed acquisition of Norfolk, fearing higher prices

The Wall Street Journal

Dec. 8, 2015—Rail shippers largely oppose Canadian Pacific Railway Ltd.’s proposed acquisition of Norfolk Southern Corp., according to a survey by Cowen and Co.

The survey found that 71 percent of respondents opposed a merger between the two companies, which would create a rail network stretching across most of North America. Fearing fewer options and higher prices, about half of those opposed said they would officially express their objections to the Surface Transportation Board, which regulates the U.S. rail industry.

A campaign from shippers against an acquisition would add to the challenges that Norfolk Southern CEO James Squires says such a deal would already face in seeking approval from regulators. The board of Norfolk Southern unanimously rejected Canadian Pacific’s initial offer of $28 billion late last week, saying it undervalued the company and underestimated regulatory hurdles. But Canadian Pacific said it will continue to pursue a merger.

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