CP Says Merger Proposal With Norfolk Southern Can Meet STB Standards

(RTTNews) - Canadian Pacific Railway Ltd. (CP, CP.TO) said it has released a white paper detailing the comprehensive, merit-based process any merger application would be subject to at the U.S. Surface Transportation Board or STB.

According to Canadian Pacific or CP, the new STB policies do not "reflect an anti-merger bias" or "reverse a statutory policy favoring mergers". The company argued in the white paper that effective regulatory approval should be fact-based and free of political interference.

The company noted that status quo is not an option for North American rail. In advancing its proposal to combine Canadian Pacific or CP and Norfolk Southern Corp. or NS (NSC), CP is confident that the proposal can meet this standard and its voting trust structure will be approved.

This is because a CP-NS combination will more than satisfy the STB's public interest standard by introducing features that will enhance competition through a number of shipper-friendly options.

According to CP, all stakeholders will benefit if the proposed transaction is evaluated on its merits and based on a full record that includes the opportunity for all interested parties to comment within the STB's prescribed framework, free from political interference.

In light of ample STB precedent and its regulatory mandate to reduce regulatory control, CP is confident that a proposed voting trust structure would be approved, but only at the appropriate time and under the clear procedure set out in the STB's merger rules.