CN, BNSF CALL OFF MERGER PLAN

CN, BNSF CALL OFF MERGER PLAN    Canadian National Railway Co. and Burlington Northern Santa Fe. Corp. said late Thursday that their boards of directors voted to terminate plans to merge, which would have created the largest railroad in North America.
   CN and BNSF originally notified the U.S. Surface Transportation Board Dec. 20 of their intentions to seek STB permission to merge and create North American Railways Inc. The STB on March 17 imposed a 15-month moratorium on rail mergers in order to create and implement new merger rules.
   The STB's moratorium was in response to concerns that competing railroads had yet to recover from their own attempts at mergers. These railroads complained that CN and BNSF's planned merger — an end-to-end consolidation that would have created a 50,000-mile rail network — would have force railroads to throw together in an effort to remain competitive.
   An attempt by CN and BNSF to challenge the moratorium failed when the U.S. Court of Appeals for the District of Columbia ruling on July 14 upheld the STB's action.
   With the 15-month moratorium rolling on, CN and BNSF would not be able to apply with the STB until at least mid-June 2001, with no regulatory decision from the STB before late 2002.
   “We have concluded it is not in the interests of our shareholders to assume the risks involved in waiting up to two-and-a-half years for a decision on our transaction by the regulator in the United States,” said Paul M. Tellier, president and chief executive officer of CN, and Robert D. Krebs, chairman and CEO of BNSF, in a joint statement.
   The two railroads will “continue to strengthen the ties that have been established between the two companies, and to capture, to the extent they can be realized by separate entities, the improvements and efficiencies that were identified as part of the combination preparation.