KCS accepts CN's merger offer...What does this mean for Amtrak?

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NSC1109

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Merger is DOA as proposed; DOJ has advised STB to reject the voting trust for CN, and the STB most certainly will reject it.
Not necessarily. Agreed that it doesn’t look good, but from reading about railroad mergers, the company trying to conduct the merger (in this case, CN), will have to make significant concessions to address anti-competitive issues (allowing trackage rights, selling certain areas to other carriers, etc).

This obviously isn’t guaranteed to happen, but it isn’t over until the STB rules.
 

neroden

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Not necessarily. Agreed that it doesn’t look good, but from reading about railroad mergers, the company trying to conduct the merger (in this case, CN), will have to make significant concessions to address anti-competitive issues (allowing trackage rights, selling certain areas to other carriers, etc).

This obviously isn’t guaranteed to happen, but it isn’t over until the STB rules.
Well, I did say "as proposed". CN may still get to buy KCS, but not with a voting trust, and only after they've sold off a bunch of it and trackage rights to others.
 

Cal

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Dead On Arrival
Department Of Justice
Surface Transportation Board

The latter has to approve the merger, taking into consideration various factors (which can be Googled).

The DOJ has picked up on something they don't like - likely competition-related and has strongly suggested that the STB not approve. Most expect the STB to follow this "advice".

Dead On Arrival is pretty much explanatory.;) In a simplified nutshell though, the STB has granted the basic go-ahead for the original CP-KCS proposal subject to the usual procedurial stuff and CN was seeking a similar exemption. It's unlikely they'll get it and without it nothing more can happen without substantial changes. The question is whether KCS' shareholders will pivot back to CP - especially if the cash is slightly sweetened (a bird in the hand), look elsewhere (US Class 1) or abandon the whole idea. It's important to note the original deal was negotiated between two willing partners - CP and KCS, whereas the CN offer while not "hostile" was "unsolicited".
Thanks for the wonderful explanation!
 

NSC1109

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Well, I did say "as proposed". CN may still get to buy KCS, but not with a voting trust, and only after they've sold off a bunch of it and trackage rights to others.
Yeah I was pretty tired when I wrote that 😴

I would be that CN tries to sell off or spin off their current line south of Champaign or St. Louis and keep the KCS main into Texas and Mexico, or some variation of that idea, whichever is fastest.
 

jis

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Bob Dylan

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I'm all for CP seeing as how CN treats VIA up in the Great White North!😉
 

zephyr17

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I'm all for CP seeing as how CN treats VIA up in the Great White North!😉
Well, CP pretty much refuses to take VIA trains at all up there, except where they have dirctional running arrangements with CN in BC and northern Ontario. Plus that remote service RDC out of Sudbury.

So be careful what you wish for.

Canada has even fewer regulatory passenger train rights than the US does, if you can believe it.

Probably best to compare CN and CP as Amtrak hosts under US regulations. In Canada, they both pretty much trample VIA.
 

NSC1109

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I'm all for CP seeing as how CN treats VIA up in the Great White North!😉
CN may not treat VIA or Amtrak very well, but CP’s operations management up there hasn’t exactly been stellar either. Trainmasters and other managers have directed crews to do dangerous things or ignored safety concerns that at one point derailed a train and cost the lives of three people.
 

Bob Dylan

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CN may not treat VIA or Amtrak very well, but CP’s operations management up there hasn’t exactly been stellar either. Trainmasters and other managers have directed crews to do dangerous things or ignored safety concerns that at one point derailed a train and cost the lives of three people.
Hadn't heard about this, maybe BNSF should buy KCS!( Not UP!)
 
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neroden

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That's interesting. In the detail view it looks like the CONO was the big factor.
....Amtrak sued CN over delaying the CONO a few years ago. I wonder if CN's management instructed the dispatchers to stop delaying the train which was the subject of the lawsuit...
 

NSC1109

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neroden

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Not sure about the veracity of the source but apparently CN is divesting the line between Baton Rouge and NOL to satisfy antitrust issues. I would expect a pretty large trackage rights package for NS, CP and maybe even UP as well.
...OK, now we're starting to look at a real possible offer.

My question is: who gets that KCS Baton Rouge - NOLA line? It's been one of the prime lines suggested for passenger service, if Lousiani ever gets its funding act together. I would like to see it owned by a passenger operator, but I'm probably dreaming.
 

NSC1109

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...OK, now we're starting to look at a real possible offer.

My question is: who gets that KCS Baton Rouge - NOLA line? It's been one of the prime lines suggested for passenger service, if Lousiani ever gets its funding act together. I would like to see it owned by a passenger operator, but I'm probably dreaming.
Given the length of the line I could see it being spun off to a shortline operator. Amtrak could also be a possibility if they can get the capital together for it. But it would be a small corridor
 

neroden

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More likely the state of Louisiana. It has generally been states buying up track for corridors, not Amtrak itself.

However, I find the prospect of Louisiana buying a railroad for Corridor passenger services pretty dim.
Governor Edwards would probably be in favor of buying it, but the state legislature -- probably not. :-(
 
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