MONTREAL, QUEBEC, CANADA — Canadian National (CN) has officially asked the US Surface Transportation Board (STB) to require the divestiture of the Kansas City Southern (KCS) line from Kansas City, Missouri, US, to Springfield, Missouri, US, and East St. Louis, Illinois, US, to CN as a condition of the proposed merger of Canadian Pacific (CP) and KCS.
The request was made in CN’s responsive application filed Feb. 28, the deadline set in STB’s procedural schedule for reviewing the pending CP-KCS merger. CP agreed in September 2021 to acquire KCS in a stock and cash transaction valued at about $31 billion.
CN asked the STB to condition any approval of a CP-KCS merger on the divestiture of the line to CN pursuant to the STB’s statutory authority to order “the divestiture of parallel tracks.” CN said granting it control of the line, which it is calling the “Kansas City Speedway,” will provide customers with a new competitive option to move goods across a key North American economic corridor.
“Under the right ownership, we believe there is a clear opportunity to bring widespread economic benefits for customers and communities across the American Midwest and Canada,” said Rob Reilly, executive vice president and chief operating officer of CN. “CN has a comprehensive plan for the Kansas City Speedway that will increase competition, create jobs, reduce roadway congestion and positively impact the environment. It reflects CN’s ongoing efforts to ensure competition and choice in our industry and aligns with President Biden’s 2021 executive order on competition.”
Final briefs are due to the STB by July 1, and a public hearing, if necessary, will be scheduled. STB’s final decision is required within 90 days of the close of proceedings.