News Content
Norfolk board rejects CP's US$28.4 billion bid, but CP says it isn't over
US eastern railway Norfolk Southern said its board unanimously rejected Canadian Pacific Railway's US$28.4 billion offer, saying it undervalues the company and would face regulatory hurdles.
CP expressed disappointed at the rejection of its proposal to create an end-to-end North American rail network that would "enhance competition and generate significant shareholder value".
"CP is committed to this transaction and looks forward to engaging with the NS leadership team, its board and its shareholders.
"CP takes exception to the claims, misdirection and mischaracterisation of its offer and the benefits such a combination would provide to customers, shareholders, the industry and the public," said the CP statement.
Canadian Pacific has argued that the combined railways would offer improved customer service and competitive rates for shippers, and that it would satisfy the US Surface Transportation Board (STB) and Canadian regulators.
Not so, said Norfolk CEO James Squires: "There is a high probability that, after years of disruption and expense, the proposed combination would be rejected by the Surface Transportation Board."
Norfolk said a combination of the companies would likely increase congestion issues in Chicago, a junction where east- and west-based North American railways meet and hand off cargo.
Canadian Pacific has said that a merger would reduce railroad traffic congestion in Chicago.
Back in November 2014, CP made an offer, which was rejected. CP again discussed a tie-up with Norfolk's rival eastern railway, CSX, but never made a formal offer.
CP chief executive Hunter Harrison has hinted that Norfolk Southern could make a good fit with CP. However, NS then chairman and CEO Wick Moorman warned investors on October 22 that rail consolidation could lead to service problems.
Many shippers still recall the service problems resulting from the merger of Burlington Northern and Santa Fe (BNSF) in 1993 and of Union Pacific and Southern Pacific in 1996.
CP expressed disappointed at the rejection of its proposal to create an end-to-end North American rail network that would "enhance competition and generate significant shareholder value".
"CP is committed to this transaction and looks forward to engaging with the NS leadership team, its board and its shareholders.
"CP takes exception to the claims, misdirection and mischaracterisation of its offer and the benefits such a combination would provide to customers, shareholders, the industry and the public," said the CP statement.
Canadian Pacific has argued that the combined railways would offer improved customer service and competitive rates for shippers, and that it would satisfy the US Surface Transportation Board (STB) and Canadian regulators.
Not so, said Norfolk CEO James Squires: "There is a high probability that, after years of disruption and expense, the proposed combination would be rejected by the Surface Transportation Board."
Norfolk said a combination of the companies would likely increase congestion issues in Chicago, a junction where east- and west-based North American railways meet and hand off cargo.
Canadian Pacific has said that a merger would reduce railroad traffic congestion in Chicago.
Back in November 2014, CP made an offer, which was rejected. CP again discussed a tie-up with Norfolk's rival eastern railway, CSX, but never made a formal offer.
CP chief executive Hunter Harrison has hinted that Norfolk Southern could make a good fit with CP. However, NS then chairman and CEO Wick Moorman warned investors on October 22 that rail consolidation could lead to service problems.
Many shippers still recall the service problems resulting from the merger of Burlington Northern and Santa Fe (BNSF) in 1993 and of Union Pacific and Southern Pacific in 1996.
Latest News
- For the first time, tianjin Port realized the whole process of dock operati...
- From January to August, piracy incidents in Asia increased by 38%!The situa...
- Quasi-conference TSA closes as role redundant in mega merger world
- Singapore says TPP, born again as CPTPP, is now headed for adoption
- Antwerp posts 5th record year with boxes up 4.3pc to 10 million TEU
- Savannah lifts record 4 million TEU in '17 as it deepens port
