CP kills Norfolk Southern merger plans
Railway abandons planned takeover of American counterpart following months of fruitless pursuit
CALGARY—Canadian Pacific Railway Ltd. is giving up the chase.
After months of trying to coax board members and shareholders of Virginia-based Norfolk Southern Corp. to the bargaining table, Canada’s second largest railway is terminating its attempt to merge with the American rail firm.
“We have long recognized that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders,” CP Rail’s CEO Hunter Harrison, said.
After the rejection of numerous overtures over the past several months, the latest blow to the merger talks came from the U.S. Dept. of Justice, which last week asked a regulating body to reject preliminary approval of the voting trust structure CP Rail had put forward for the multi-billion merger.
The Canadian railway said “no further financial offers or overtures to meet with the NS board of directors are planned at this time.” Despite the decision, CP continues to insist a “true” end-to-end railroad is what the North American rail industry needs.