OMAHA, Neb. (AP) – Regulators on Monday dealt a procedural blow to Canada’s $ 33.6 billion national plan to acquire the Kansas City Southern Railroad.
The U.S. Board of Surveillance has rejected Canada’s National Plan for Voting Credentials, which will have the Kansas City South Railway, while regulators are reviewing the deal. The STB said it could not review the Canadian National program at this time because it did not include a detailed merger agreement.
Canadian National described the decision as a slight setback. It says it will now re-introduce the program, as it did last week with the merger agreement. Kansas City South said Thursday that Canada’s national bid is better than the $ 25 billion deal it made with rival Canada Pacific Railroad a month ago.
A Canadian national statement said he was confident he would be able to prove that his “confidence in the vote is in the public interest” if regulators review all the details.
The Canadian Pacific took the decision as a sign of weakness in CN’s bid, as the STB had already approved the Canadian Pacific Voting Trust Program. The Canadian National reported that its vote of confidence in the vote is almost identical to that of the Canadian Pacific.
“With this new decision by the STB, the CP’s confidence in the supremacy of its friendship agreement with KCS is redoubled,” the Canadian Pacific said in a statement. Until now, CP has refused to increase its bid for Kansas City Southern, but still has a few days to formally respond to Canada’s national bid.
The STB said it would carefully review any deal with Kansas City South to see if it would boost competition and serve the public interest. This test can take more than 18 months. If regulators eventually reject the deal, the vote of confidence will sell Kansas City South so it can remain independent.
Regulators said Monday they would reconsider Canada’s nationally proposed acquisition of the Southern Territory of Kansas City under stricter rules passed in 2001, when several rail mergers occurred in the 1990s due to service issues. The council did not approve the major rail merger because it had issued tougher rules, but the Canadian national said it believed the deal should be reviewed with newer rules.
In the past, the council has said it will apply its older, less strict merger rules to the proposed Canadian Pacific combination with South Kansas City, as there is little overlap between those railways, which are two of North America’s largest railways.
The two Canadian railways have been involved in public relations since CN joined the bid.
The Canadian Pacific has criticized the rival bid for saying that Kansas City South և both Canadian Nationals have railways that compete for business և Coast և Coast և Coast և. The Canadian Pacific Network connects south of Kansas City to Kansas City, Missouri, but the two railroads do not overlap.
The Canadian national team stated that it does not believe that its proposal will harm the competition, and is confident that it can solve any competition problem in the review process in the future.