Canadian Pacific Railway Ltd. announced today it has terminated efforts to merge with Norfolk Southern Corp.
CP said the termination included withdrawing a resolution asking NS shareholders to vote in favor of good-faith negotiations between the two companies. The rail giant also stated that “No further financial offers or overtures to meet with the NS board of directors are planned at this time.”
"We have long recognized that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders," said CP CEO E. Hunter Harrison.
Word of the merger bid being dropped was greeted positively by Rep. Bill Shuster (R-PA), Chairman of the House Transportation and Infrastructure Committee. “I believe this proposal was bad for America, and our Nation’s military also raised concerns about the negative implications it could have for national defense,” he said in a statement issued shortly after the news broke.
“This merger was not in the best interests of the country, the U.S. freight transportation system, railroad employees, rail shippers, and short line railroads, and I am glad that Canadian Pacific heard that message and decided to move on,” Shuster continued. “The railroads should now focus on “improving the movement of goods to continue our economic growth.”
CP has maintained that its bid to merge with NS aimed to create “a true end-to-end railroad that would enhance competition, ease freight congestion now and into the future, improve service to shippers, better support the economy and generate significant shareholder value for both companies.”
In a white paper published recently to buttress its consildation argument, CP contended that the proposed merger would result in “a single-line, transcontinental option that improves market access and ensures the timely and efficient flow of freight – supporting the North American economy now and into the future.”
Canadian Pacific Railway is a public company with shares trading on the Toronto and New York stock exchanges, CPR's 14,000-mile rail network extends across the continent from the Port of Vancouver to The Port of Montreal as well as to U.S. industrial centers near Chicago, Newark, Philadelphia, Washington, New York City and Buffalo.
HDT contacted the American Trucking Associations regarding today's CP announcement, but ATA declined to comment on the merger proposal being dropped.