Canadian Pacific Alleges Competitors Trying to Block Union Pacific Deal
20 1월 2016 - 3:52AM
Dow Jones News
By Jacquie McNish and Laura Stevens
Canadian Pacific Railway Ltd. on Tuesday stepped up efforts to
win support for its hostile bid to merge with Norfolk Southern
Corp., filing a complaint with the U.S. Department of Justice
alleging some of its competitors were acting together to thwart the
deal.
In a letter to Justice officials, the Calgary, Alberta-based
railroad operator said recent public criticisms of its proposal by
senior officials from CSX Corp. and Union Pacific Corp. marked "a
concerted effort to block" the planned deal to protect their
business, in violation of antitrust laws.
"The fact that these major railroads have joined to work so
feverishly against CP's proposal speaks volumes about their
concerns regarding the impact the transaction would have on their
competitive positions," the letter said.
A spokesman for Union Pacific disputed the allegation. "We have
communicated with other railroads for the purpose of petitioning
the government. We oppose this merger, and we are prepared to
discuss our views with the government," he said.
Spokespeople for Norfolk Southern and CSX declined to
comment.
Since Canadian Pacific announced its cash-and-stock merger
proposal for Norfolk Southern last November, its merger ambitions
have been challenged by rapidly shrinking freight levels due in
part to the commodity slump. The stocks of North America's seven
Class 1 railways have swooned in the face of sharp declines in
freight traffic. Canadian Pacific has weathered the worst drop,
with its stock price down about 17% since the beginning of the
year. Norfolk Southern's shares have fallen 15% in that time.
At midday Tuesday, CP was trading on the New York Stock Exchange
at $106.45, up 2%. Norfolk Southern was trading at $71.90, up
0.2%.
CP, backed by one of its major shareholders, activist William
Ackman, has said a merger with Norfolk Southern would create a more
efficient rail network and reduce expensive traffic bottlenecks,
particularly in the Chicago area.
Competitors, meanwhile, have complained the merger would limit
competition and trigger price increases.
Write to Jacquie McNish at Jacquie.McNish@wsj.com and Laura
Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
January 19, 2016 13:37 ET (18:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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