Regulators to conduct hearing on CP’s plan to merge with KCS

A photograph of two locomotives. One is from Canadian Pacific and the other is from Kansas City Southern.

The Surface Transportation Board will conduct a three-day hearing in September on the proposed merger between Canadian Pacific and Kansas City Southern in order to speak directly with the railways, as well as any other interested parties, about issues that have arisen during the proceeding.

“I have strongly favored public hearings in our proceedings, which not only allow the board members to deeply explore the issues with our stakeholders but also advance transparency into our decision-making,” STB Chairman Marty Oberman said in a news release. “In light of the significant issues involved in the board’s consideration of the proposed CP-KCS transaction, it is essential that we hear directly from the applicants and our stakeholders and do so in public.”

The board also agreed to modify the procedural schedule so that final briefs will be due by Oct. 14 instead of Sept. 30.

The public hearing will take place at STB headquarters in Washington. Those wishing to speak must notify the board before Sept. 14.

Since STB’s Office Environmental Analysis is addressing environmental and historic preservation issues, those subjects will not be part of the hearing.

STB’s notice about the hearing is available here

Shareholders of CP (NYSE: CP) and KCS approved the $31 billion deal in December, and the merger now sits before STB for review. CP has said it hopes for the agency’s approval by early 2023.

In a separate, unrelated announcement from Friday, the board also took action in the proceeding where Amtrak is seeking to restore Gulf Coast service between New Orleans and Mobile, Alabama.

The board denied Amtrak’s request for further information on unresolved issues, including additional rail traffic controller studies from an expert who was utilized but not affiliated with CSX and Norfolk Southern, two other parties involved in the proceeding. All the key parties involved — Amtrak, CSX, NS and the Alabama State Port Authority — participated in a multiday hearing in April and May where the discovery disputes were significantly narrowed, STB said. 

The board also denied a request from CSX (NASDAQ: CSX), NS (NYSE: NSC) and the port authority for a technical conference as well as time extension requests. The current filing deadline for supplemental evidence remains Wednesday, STB said. 

Amtrak wants to run two round trips per day on CSX- and NS-owned tracks and infrastructure between New Orleans and Mobile and asks STB to order CSX and NS to allow that service, according to a March 2021 request to STB. But CSX, NS and the Port of Mobile contend the additional service would severely hamper freight rail movements without adequate study on how best to integrate Amtrak’s service with existing freight rail activity.

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