Merger surprises

The recent news that Canadian Pacific and Norfolk Southern are talking about merging is the latest in a decades-long string of surprise merger announcements. Even more surprising, instead of the two parties stepping toward the negotiating table as equals, it is CP that is offering to buy NS.

Of course, given the stakes involved in such deals, prospective merger partners rarely telegraph their intentions ahead of time. Surprise is part of the game plan. True, there’s a years-long inevitability to some combinations, like 1995’s Union Pacific + Chicago & North Western. And industry insiders and analysts who carefully follow the positions and possibilities of today’s railroads can see almost any reasonable scenario coming before news of it breaks. But the rest of us are often thunderstruck by announcements like CP+NS.

At Classic Trains, we deal in a world of scores of major railroads, each one, as Forbes once said of the Pennsylvania, a nation unto itself. Each road had its own territory, its own shops, its own locomotive designs, its own style of dining-car service . . . its own culture. Merge the Erie and the Lackawanna? You might as well think about combining Japan and Korea.

Chesapeake & Ohio’s 1947 absorption of longtime affiliate Pere Marquette is often cited as the first “modern” merger. The next big move, Louisville & Nashville’s takeover of Nashville, Chattanooga & St. Louis a decade later, involved roads with a similar parent-subsidiary relationship. Since then, the combinations have gotten ever more outlandish, so that now Union Pacific runs the Rio Grande, the Bessemer & Lake Erie is a Canadian National property, and the New York Central’s Water Level Route is split among four owners. 

After all these years and all those mergers, you’d think we’d be used to it by now. Well, we are — we even have a name for the many defunct railroads, “Fallen Flags,” coined by Classic Trains Senior Editor Dave Ingles when he was a Trains staffer 40 years ago. And we aren’t — mergers still surprise us.