Reuters — Canadian Pacific Railway (CP) said Wednesday it is looking at all legal options in response to what it described as concerted efforts by certain U.S. railroads to block its proposed merger with Norfolk Southern.
“It is unfortunate that CP must consider the use of litigation to ensure a level playing field and protect its rights,” CP, Canada’s second largest railroad, said in a statement.
CP’s US$28 billion plan to buy Norfolk Southern has garnered support from more than 80 shippers, but is being opposed by Norfolk Southern and a number of industry groups and other rail customers.
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Some U.S. railroads said on Wednesday they were not participating in any anti-competitive activities.
“CSX has not been part of, nor is it aware of, any anti-competitive activities related to mergers, or otherwise, in the railroad industry,” spokeswoman Melanie Cost said by email.
A spokesman for BNSF Railway declined to comment on Wednesday.
CP has previously raised concerns that U.S. railroads were working collectively to oppose its proposed merger with Norfolk Southern. In January, CP said in a statement that it asked the U.S. Department of Justice to “review” the actions of certain railroads “who have stated publicly that they are organizing a collective campaign” to block industry mergers.
The proposed merger, announced in November, would come under regulatory scrutiny from the Surface Transportation Board over its impact on the U.S. rail market, in particular the possibility it could spark competition-crushing rival deals, according to former regulators and analysts.
It would be the first deal reviewed by the STB since the U.S. rail regulator rewrote merger rules in 2001.
CP said in February it would seek an order from the STB confirming the viability of the complex deal structure it intends to use in its proposed takeover of Norfolk Southern.
The Wall Street Journal reported Tuesday that CP had approached CSX in January about a takeover, but the railroad rebuffed CP’s advances.
— Reporting for Reuters by Allison Lampert in Montreal and Nick Carey in Chicago.
