Merger update: CP touts opposition to CN’s use of voting trust

(Source: Progressive Railroading 06/01/2021)

Canadian Pacific today announced that more than 130 stakeholders have filed statements with the Surface Transportation Board (STB) asking it to reject CN’s proposed use of a voting trust.

This brings the total letters submitted to more than 960, including 250-plus expressing concern about CN and Kansas City Southern‘s combination, its use of a voting trust, or both, and more than 730 in support of CP-KCS, CP officials said in a press release.

The opposition letters — which came from shippers, ports, local governments, transportation associations and other stakeholders — highlight the “extensive risks” the proposed CN-KCS voting trust poses to competition by reducing shipper options, CP officials said. Stakeholders also expressed concerns over the likelihood of reduced service quality and infrastructure investments as a result of the proposed CN transaction, they added.

The concerns echo those of the U.S. Department of Justice, which on May 14 filed comments with the STB objecting to CN’s proposed use of a voting trust on the grounds that a CN merger with KCS would pose greater risks to competition than the CP-KCS agreement, according to CP.