The agreement would give CN added Midwest operating access while ending its opposition to Union Pacific’s proposed $71.5 billion merger with Norfolk Southern, subject to regulatory approval and closing.
Canadian National Railway and Union Pacific have reached a deal that would expand CN’s operating access in the U.S. Midwest in exchange for CN dropping its opposition to Union Pacific’s proposed $71.5 billion merger with Norfolk Southern. The arrangement, which remains contingent on Surface Transportation Board approval and the merger closing, includes rights for CN to run trains between Tuscola and East St. Louis, Illinois, and to serve customers between St. Louis and Kansas City, Missouri. Earlier details disclosed by the companies also said CN would gain competitive access at certain shipper facilities where rail options would be reduced, along with Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis, and access to Union Pacific’s Neff Yard in Kansas City. The agreement is designed to preserve competition in key Midwest markets as the rail industry weighs a major consolidation.