Canadian Pacific Railway Ltd. on Monday said it would drop its fight to merge with rival railroad Norfolk Southern Corp., saying it sees “no clear path to a friendly merger at this time.”
The company said it withdrew its resolution asking Norfolk Southern shareholders to vote in favor of good-faith negotiations and that it doesn’t plan any further financial offers or overtures.
Canadian Pacific has no plans to seek mergers with other railways, Chief Executive Hunter Harrison said in an interview. He said the company’s board decided to abandon its merger ambitions over the weekend as it became clear that political and industry opposition was too great.
“I doubt very much we will be reaching out to anyone else. We fought the good fight, we tried to educate the public, but the political and economic environment was against us,” he said.
A Norfolk Southern spokesman didn't immediately respond to a request for comment.
My take is that the only expansion into the US by Canadian Pacific would be a CP/KCS combination. This would afford CP access to the Gulf ports that Canadian National gained with their acquisition of IC, and allow parity between the two roads for handling Canadian agricultural and petroleum products to the Gulf.
I further hold that if a KCS/CP moved forth, they would have to spin off their KCSM lines. To whom I know not. Perhaps now that "Yanqui know how" has been in place, the Mexican government will want them back.
But I think the initiative has shown that the "final four" are on their way to becoming Transcontinental "duopolies". Will it be CSX/BNSF and NS/UP or vice versa? Younger folks tune in; maybe someone will tell me "upstairs".
Posts: 9979 | From: Clarendon Hills, IL USA (BNSF Chicago Sub MP 18.71) | Registered: Apr 2002
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