Matt Rose at BNSF has stated publicly that if the CP-NS merger moves forward then BNSF would enter the fray, so to speak. However, what that specifically entails could really be just about anything. It could be as an intervenor or "co-buyer" in the CP-NS transaction, much like NS intervened in the original CSX-Conrail merger proposal to divide the property. It could be a higher offer than CP's for the whole NS property.
Or perhaps the BNSF move could be to make sure they don't get aced out of ownership in the Eastern US by proposing their own merger with CSX.
This discussion topic is not to discuss the merits of CP-NS, but rather to have a discussion as to which Eastern US property would meld better with BNSF if the balloon goes up.
There are some interesting possibilities if BNSF would choose a CSX merger as their reaction to CP-NS.
BNSF utilizes CSX from Birmingham to Atlanta already for its substantial Southern California-Atlanta intermodal traffic.
BNSF's former Frisco and its connection with the CSX former Big Four at St. Louis might take on added importance as the most direct route to Indianapolis, Louisville and Cincinnati for traffic to and from the Southwest and West Coast. It could become a de facto bypass of Chicago similar to the NS-owned former Wabash.
The Frisco and its connection at Memphis with the former Nashville, Chattanooga & St. Louis would be the most direct route for traffic to and from the Southwest and West Coast to Nashville.
In New Orleans, BNSF's connection to the former Louisville & Nashville would allow Texas and Louisiana Chemical Coast traffic to take the most direct route to the Southeast and the Northeast.
In Illinois, CSX already has trackage rights on the NS-owned Kankakee Belt at Streator.
BNSF traffic on the former ATSF could be diverted around Chicago at Streator on the Kankakee Belt and at Joliet on the former Rock Island. BNSF traffic on the CB&Q could also pick up the former Rock Island at either Wyanet, IL or the Zearing to La Salle branch. With some new connecting tracks, either of those diversions to the former Rock Island would allow traffic to "skim" the south side of Chicago and head through to the CSX double track main line to the East.
Traffic from Mexico generated by the increasing number of manufacturers who are "near-sourcing" would have single line access from the Texas-Mexico border to just about any location in the continental United States.
Likewise, from East Coast ports in Miami, Tampa, Jacksonville, Savannah and Charleston, there would be single line service to many cities in the Southwest and Upper Midwest, so there would be an opportunity to garner traffic from an expanded Panama Canal and the emergence of manufacuring on the African Continent.
The points noted are just from studying maps and reading up on what I can. Comments on the relative merits of either BNSF-CSX or BNSF-NS are welcome.
kgbw49have a discussion as to which Eastern US property would meld better with BNSF if the balloon goes up.
Uncle Warren certainly has enough money to make things interesting.
A CP/NS union would likely entail a significant chunk of CP stock going to NS shareholders in exchange for their NS holdings. I'm wondering if Berkshire could buy a large enough chunk of both CP AND NS up front such that a subsequent CP-NS merger would give Berkshire effective control of the whole enchilada?
Nice little 'poison pill' strategy if it could work.
I've been reading in that Bill Brosnan book about how N&W manipulated the corporate structure in it's union with Southern effectively making Southern the subordinate member.
Be carefulwhat you wish for...etc.
Convicted OneI'm wondering if Berkshire could buy a large enough chunk of both CP AND NS up front such that a subsequent CP-NS merger would give Berkshire effective control of the whole enchilada?
BH may have enough cash in their slush fund to do that, but didn't they have to divest themselves of some other rail stock before the BN/SF merger could be approved?
Norm
Wouldn't surprise me. But Warren likely has friends who would help. Bill Gates likes to play choo choo too, I've read.
Berkshire didn't own BNSF when BN and SF first merged, did they?
From what I have read on the CP/NS merger thread, as of the end of the year Burkshire Hathaway had $68 billion dollars in cash. More than enought to stir the CP/NS pot. An interesting possiblity from the maps that I have looked at is a BNSF/NS merger. Similar results from the just discussed BNSF/CSX merger. ST Louis, Kansas City, Streeter, New Orleans and Memphis for end to end BNSF west coast through to NS east coast points.
Convicted OneBerkshire didn't own BNSF when BN and SF first merged, did they?
I believe you are correct. I do, however, recall BH having to divest some rail stock. Likely it wasn't related.
Norm48327 Convicted One Berkshire didn't own BNSF when BN and SF first merged, did they? I believe you are correct. I do, however, recall BH having to divest some rail stock. Likely it wasn't related.
Convicted One Berkshire didn't own BNSF when BN and SF first merged, did they?
BH owned some NS (I think) stock that they were made to divest before buying BNSF.
Convicted One kgbw49 have a discussion as to which Eastern US property would meld better with BNSF if the balloon goes up. Uncle Warren certainly has enough money to make things interesting. A CP/NS union would likely entail a significant chunk of CP stock going to NS shareholders in exchange for their NS holdings. I'm wondering if Berkshire could buy a large enough chunk of both CP AND NS up front such that a subsequent CP-NS merger would give Berkshire effective control of the whole enchilada? Nice little 'poison pill' strategy if it could work. I've been reading in that Bill Brosnan book about how N&W manipulated the corporate structure in it's union with Southern effectively making Southern the subordinate member. Be carefulwhat you wish for...etc.
kgbw49 have a discussion as to which Eastern US property would meld better with BNSF if the balloon goes up.
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