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Huge Rail Merger Called Off

July 23, 2000

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A merger that would have created North America's largest rail network hsa been called off.

Canadian National Railway Co. and Burlington Northern Santa Fe Corp. killed their merger plans last week, saying that a U.S. moratorium on big rail mergers would have delayed their combination until late 2002.
The Surface Transportation Board imposed a 15-month moratorium on rail mergers last March, giving it time to create new guidelines for consolidation in the industry. Last week, an appeals court rejected an appeal by CN and BNSF to strike down the moratorium.
The STB said it wanted to develop new rules in light of congestion created by past consolidation. In the East, CSX Corp. and Norfolk Southern Corp. are still experiencing service difficulties more than a year after they divided Conrail Inc. -- service difficulties that were a mixed blessing for trucking companies, offering them more freight than they could handle when customers decided to pull loads from rail.
Just a day after the announcement, CN announced it would share tracks with rival Canadian Pacific Railway Co. in Canada and the United States.
According to Reuters, the five-year agreement will give CN access to CPR's Northeastern U.S. network in New York, New Jersey and Pennsylvania. In a second three-year deal, CPR will operate trains on CN's busy Toronto-Chicago main line.

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