Railroads will have to show how any further mergers will benefit shippers and the economy in general. Will further mergers reduce rates and/or improve service levels? Show us how. Shippers generally have been opposed to further mergers. And unlike railroads, shippers on this continent have been struggling for years. Many of them vote and have representatives who are deadset against another merger that would reduce competition.
Just a thought...when Norfolk & Western merged with the Southern, it took a name - Norfolk Southern - that happened to be the name of an old railroad that had existed up into the 1950's. As a New York Central fan, it would be interesting if a merged Canadian Pacific / Norfolk Southern chose the name "Canada Southern".
https://en.wikipedia.org/wiki/Canada_Southern_Railway
Although I guess "Norfolk Pacific" would be OK too, but BNSF already owns the "NP" reporting marks.
I suspect that this proposal will get about as far as the late 1990's proposed merger between BNSF and CN did:
http://www.eriksrailnews.com/archive/bnsfcn.html
That plan would have put the two railroads under common ownership but kept their operations and identities independent (at least for the first few years) which If I understand correctly is what H. Harrison and co, are proposing to do with CN/NS. The regulators still nixed it..
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
carnej1 I suspect that this proposal will get about as far as the late 1990's proposed merger between BNSF and CN did: http://www.eriksrailnews.com/archive/bnsfcn.html That plan would have put the two railroads under common ownership but kept their operations and identities independent (at least for the first few years) which If I understand correctly is what H. Harrison and co, are proposing to do with CN/NS. The regulators still nixed it..
The STB didn't really "nix" the deal. They just decided to rewrite the rules and told BNSF + CN to come back later once the new rules were done. It was really more of stiff-arm than a "no".
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
blue streak 1 cnbc really goofed up read short article and tell me what United Pacific railroad is. http://www.cnbc.com/2015/11/09/norfolk-southern-canadian-pacific-shares-jump-amid-deal-report.html
cnbc really goofed up read short article and tell me what United Pacific railroad is.
http://www.cnbc.com/2015/11/09/norfolk-southern-canadian-pacific-shares-jump-amid-deal-report.html
The only thing CNBC knows about is Shake Shack and Herbalife.
Stocks that are clearly manuipulated by insider trading, pump and dump, Bud Fox style. And offer nothing to the general population.
They arn't too sharp when it comes to something that can't be explained in basis points or put options.
oltmannd carnej1 I suspect that this proposal will get about as far as the late 1990's proposed merger between BNSF and CN did: http://www.eriksrailnews.com/archive/bnsfcn.html That plan would have put the two railroads under common ownership but kept their operations and identities independent (at least for the first few years) which If I understand correctly is what H. Harrison and co, are proposing to do with CN/NS. The regulators still nixed it.. The STB didn't really "nix" the deal. They just decided to rewrite the rules and told BNSF + CN to come back later once the new rules were done. It was really more of stiff-arm than a "no".
The STB used the 18 months to come up with new rules for large mergers. They soon got a good workout when CN - by then led by E. Hunter Harrison - acquired the EJ&E. The hoops that CN had to jump through were astoundingly difficult - only the very large prospective value of the EJ&E to CN as a bypass and connection in the Chicago area justified going through with it. "Never say never", but it'll be a long time and a very compelling economic case before any 2 railroads attempt to merge and run that gauntlet again.
- Paul North.
Paul North, above, brings back some bad old memories. The hoops CN had to jump thru really were outrageous, given that all they asked was to run trains on existing right of way. There wasn't even any forced sale of private property, except possibly -- I don't know -- in connection with an overpass/underpass or two for the sake of other traffic.
Given NIMBYs; shippers who fancy themselves entitled to two railroads (along with trucks and sometimes pipelines and barges); and other railroads envious of what they could have done first by getting off their dead rears -- it is indeed hard to foresee any big new mergers at a price the buyer could afford.
Whoever goes first in this next round of possible mergers will have more work to overcome all those roadblocks than any who follow. Lets say that CP and NS are serious about a merger. They would then be the pioneers in this final round, and they will be clearing the way for the others to follow at much less cost and effort. So whose smarter? Notice how others remain silent on mergers... they're smart enough to let CP do the heavy lifting on this..
I hate CP! If this atchully happens hopefully they dont derail another oil train and cause evacuations like they did in wisconsin.
CBT I hate CP! If this atchully happens hopefully they dont derail another oil train and cause evacuations like they did in wisconsin.
In my 16 years of living near to the Milwaukee-MSP Milwaukee Road Mainline, they had no less than 4 derailments that I personally saw the aftermath of, one that ended their Milwaukee to Watertown Passenger Service a year past Amtrak takeover. I am sure there were more than that......those are just the ones I saw. Not all the derailments were the Milwaukee Roads fault, the passenger train derailed because a cement truck hit the trestle in which the train passed over a road on and knocked the track out of alignment. Another was caused by a hot box. Another dragging equipment. Forget the causes of the fourth but it was the infamous derailment that wiped out the Elm Grove, WI depot.
Ackman is not into railroads for anything other than the money he can extract from them, that includes CP and any other carriers that may get mentioned as a partner for CP. Typical hedge fund pump & dump.
I suspect Ackman (and his Pershing Capital) have bought all the NS stock possible without triggering SEC reporting requirments, after NS stock jumps on the basis of the 'news' he will dump most of it and make a nice profit.
Never too old to have a happy childhood!
I agree with Mr. Frailey - EHH is not going to be seen as the loser again in the denoument of his epic career.
It would not be surprising to see a hostile takeover attempt if agreement cannot be reached.
Get ready for the Norfolk & Northwestern, Norfolk, Winnipeg & Western, Norfolk & Pacific or other such name of choice.
EHH might not have a choice, and unless he plans to retire in his 80s he won't see the process through to completion at any rate. He might get it started and then pass the torch to Keith Creel. EHH has already made his mark, he doesn't need this and he knows it.
kgbw49Get ready for the Norfolk & Northwestern, Norfolk, Winnipeg & Western, Norfolk & Pacific or other such name of choice.
UP didn't bother with any of that. Winner take all - CP.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
True that. But that's no fun.
In recognition of the regulatory morass that would have to be navigated, plus the end of 611 in steam once again, how about the Dismal Swamp & Moose Jaw?
kgbw49how about the Dismal Swamp & Moose Jaw?
Now, now. Now! That's funny, but. . .
Ahem.
Bruce
So shovel the coal, let this rattler roll.
"A Train is a Place Going Somewhere" CP Rail Public Timetable
"O. S. Irricana"
. . . __ . ______
kgbw49 Get ready for the Norfolk & Northwestern, Norfolk, Winnipeg & Western, Norfolk & Pacific or other such name of choice.
It could be southern pacific the SECOND
tree68 kgbw49 Get ready for the Norfolk & Northwestern, Norfolk, Winnipeg & Western, Norfolk & Pacific or other such name of choice. UP didn't bother with any of that. Winner take all - CP.
Unfair, Tree. UP kept the "Union" from their road and the "Pacific" from SP.
dakotafredUnfair, Tree. UP kept the "Union" from their road and the "Pacific" from SP.
I guess it is just my devious nature, but I have to wonder if all of this is just theater to stampede nervous CSX investors into the arms of EHH.
In spite of a good operating ratio, CSX has suffered from the downturn in coal and a major unplanned management shake up. Everything seems to be held together by Michael Ward, and while he doesn't appear to going anywhere soon, it could make some investors uncomfortable.
I think CPRS still has it's eyes on the prize....Indiana Harbor Belt and a direct route through Chicago. NS and CSX both own 25.5% of IHB, CPRS has the remaining 49%, so acquiring either NS or CSX will give control of IHB to CPRS. However CSX also brings the old B&OCT to the table with it's parallel and paired track to IHB. Then there is the stock price, CSX is about 1/3 of NS stock.
It's not that NS is not a well managed operation, that's the problem, it's too well run, and I would expect them to go eyeball to eyeball with EHH. Then there is a very real chance that BNSF, UP, CN or even KCS could get involved.
I wonder if some CSX investors might be afraid of missing the big check from CPRS, and start leaning on Jacksonville to take the deal, before things can be worked out with NS.
Game, set and match to Mr. Harrison.
UP already was Union Pacific over a hundred years befor they bought the SP. How about the "Gored And Defeated Railraod North (GDN)"
WM7471 [snipped - PDN} . . . I think CPRS still has it's eyes on the prize....Indiana Harbor Belt and a direct route through Chicago. NS and CSX both own 25.5% of IHB, CPRS has the remaining 49%, so acquiring either NS or CSX will give control of IHB to CPRS. . . . Then there is the stock price, CSX is about 1/3 of NS stock. . . .
The important number is not the stock price in $ per share, but the total market capitalization of the business = number of shares x their price, and how much would have to be purchased to have effective control of the company. For example, a company with 1 million shares at $50 = $50 million, but would be less expensive to obtain control (on a percentage of the total shares issued and outstanding) than a company with 5 million shares at $30 = $150 million market capitalizaton.
As someone mentioned above, Ackman's fund has been hammered badly by the Valeant fiasco and some other bad investments (see recent Wall Street Journal article, within the last week). I too view this rumor as an attempt at market manipulation - by someone - to bump up the value of CP shares, and perhaps enable Ackman recover from some of his losses elsewhere through the railroad's shares.
WM7471 However CSX also brings the old B&OCT to the table with it's parallel and paired track to IHB. Then there is the stock price, CSX is about 1/3 of NS stock.
However CSX also brings the old B&OCT to the table with it's parallel and paired track to IHB. Then there is the stock price, CSX is about 1/3 of NS stock.
Don't get hung up on stock price, look at the market cap for both railroads.
An "expensive model collector"
caldreamer It will NEVER happen. The STB will NOT allow two Class 1 railroads to merge. It would diminish competition. Then there is the Anit-Trust division of the Justice Department. If this happens bring me a super size plate of humble pie!!!
It will NEVER happen. The STB will NOT allow two Class 1 railroads to merge. It would diminish competition. Then there is the Anit-Trust division of the Justice Department.
If this happens bring me a super size plate of humble pie!!!
Those same words were probably spoken before every other major merger.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.
Paul_D_North_JrWhere does NS connect directly with CP - 1) anyplace ?
Schenectady, NY on the east coast.
Excerpt from The Globe and Mail, Nov. 9
http://www.theglobeandmail.com/report-on-business/canadian-pacific-said-to-explore-norfolk-southern-takeover/article27176306/
Benoit Poirier, an equities analyst with Desjardins Capital Markets, noted that CN’s superior network was assembled when Mr. Harrison was at the company. Since taking control at CP in 2012 after a boardroom battle led by activist investor Bill Ackman, Mr. Harrison has made strides to improve CP’s efficiency and profitability. Building a better rail network and applying his operational model to the underperforming Norfolk Southern, Mr. Poirier said, could be next on his to-do list.
Railway leaders and observers in the industry have said the U.S. Surface Transportation Board would be reluctant to approve rail mergers at a time when complaints about rail congestion and service are high. After blocking a merger between CN and Burlington Northern Railroad in 2000, the U.S. regulator toughened its rules and said any merger must improve service, not merely preserve it.
However, Mr. Harrison never abandoned his belief that rail mergers would help to relieve the congestion that grips the industry, particularly in Chicago, where the big carriers hand over railcars to each other. He has said a merger would improve service, efficiency and capacity, but “nobody wants to do a deal.”
Mr. Poirier highlighted some of the service improvements a merger could bring, including offering oil shippers in the Bakken and oil sands direct access to refineries on the U.S. East Coast. And the combined companies could offer a “unique” route for intermodal containers to Florida from Vancouver.
Excerpt from The Globe and Mail, Nov. 11
http://www.theglobeandmail.com/report-on-business/cp-railways-proposed-takeover-of-norfolk-southern-would-face-scrutiny/article27217277/
Anthony Hatch, a transportation analyst and founder of New York-based ABH Consulting, said support from rail customers will be vital if any merger is to pass the “complicated” approval process involving several jurisdictions.
But he predicted reaction from shippers will range from “neutral and sullen” to “actively opposed” to this and any other proposed union that emerges…
From a railway standpoint, Mr. Hatch sees a few key reasons the merger is a bad idea, including the risk that regulators will impose conditions that will trump any financial gains the takeover will bring.
Norfolk Southern, he said, is known as a “railroader’s railroad” with a strong southern culture that is unlikely to welcome a takeover.
“Norfolk Southern is likely to fight this,” Mr. Hatch said.
He noted CP chief executive officer Hunter Harrison is not known for “diplomacy and tact” in his dealings with regulators and shippers, characteristics that might not help with any approvals.
zugmann caldreamer It will NEVER happen. The STB will NOT allow two Class 1 railroads to merge. It would diminish competition. Then there is the Anit-Trust division of the Justice Department. If this happens bring me a super size plate of humble pie!!! Those same words were probably spoken before every other major merger.
Thanks to Chris / CopCarSS for my avatar.
Other CP-NS connecting points besides Schenectady and Chicago are Buffalo, Detroit, and Kansas City.
CN with the J already in hand and Prince Rupert (the closest intermodal terminal to China) might be a better fit with NS. (Gulf, Mobile & Arctic?) That could be the fastest total transit time for a container between Shanghai and New York.
it would seem if this domino tips there will end up being a slicing and dicing of the two eastern roads between the two Canucks and the two western roads because they will all demand an equal piece of the action. No one will want to be left by the wayside.(Does Mr. Buffett's road still have rights to Atlantic & Pacific? If not, how about the Berkshire, Ozark and Sierra Railway - who's the BOS now?)
Intriguing stuff, no doubt.
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