CP: Shipper support for NS takeover growing

Canadian Pacific has received three letters from rail shippers in support of its proposed acquisition of Norfolk Southern Corp. for every one customer opposition letter, according to a statement from the Calgary-based railway.    Canadian Pacific’s proposed takeover number four U.S. railroad Norfolk Southern Corp. is being met with “overwhelming support” from rail shippers, according to a statement from the Calgary-based railway.
   CP said it has received over 80 letters from customers in support of the acquisition – three letters for every one sent in opposition of the deal.
   “These letters of support demonstrate that shippers with business in both the United States and Canada agree that the proposed combination would be beneficial,” the company said.
   Since last November, NS has rejected three separate cash-and-stock purchase offers from CP valued at around $30 billion, calling them “grossly inadequate” and unlikely to win regulatory approval from the U.S. Surface Transportation Board.
   CP earlier this month submitted a non-binding resolution urging NS shareholders to ask the company’s board of directors to engage in negotiations with CP. The company also said it would seek a declaratory order from the STB in an attempt to confirm the “viability of the voting trust structure that CP has suggested as part of its proposed merger with Norfolk Southern Corp. (NS).”
   CP has repeatedly argued the proposed acquisition would enhance competition, increase service levels for its customers and drive economic growth, but the deal has already seen strong opposition from other Class I railroads like CSX Corp., Union Pacific Corp. and BNSF Railway, members of Congress, rail unions, NS customers, and even parcel giant UPS – CP’s largest intermodal shipper.
   “CP is committed to providing the best service at the best price,” said President and COO Keith Creel. “Change is necessary to support continued economic growth, and continued growth in the U.S. economy is dependent on North American rail service meeting current and future demand. Without the ability to add infrastructure or build more track, options to increase capacity are becoming limited.”
   “The proposed transaction offers the best opportunity to improve efficiency of the existing network and create much needed incremental capacity without adding infrastructure, all while improving service for shippers,” the company added. “A combined CP-NS railroad would enhance competition and better support the success of the shippers and industries it serves, and satisfy the STB and Canadian regulators.”