Hours after the U.S. Surface Transportation Board rejected Union Pacific’s application to acquire Norfolk Southern as “incomplete,” the Western Class I vowed to press on in its effort to create the first single transcontinental railroad.
In a brief statement to Railfan & Railroad late Friday night, a spokesperson for UP simply wrote, “Union Pacific will provide the additional information requested by the Surface Transportation Board.”
On Friday afternoon, the STB announced it was rejecting UP’s initial application due to insufficient information. Among the issues the STB identified in the initial application was an incomplete market analysis. For example, UP and NS stated that it would take three years for the benefits of increased traffic from the merger to be realized. However, the application did not provide an analysis of what those traffic levels would be; it only showed what they would be on the first day of the combination.
The STB’s decision will undoubtedly delay UP’s efforts to acquire NS. It will also be seen as a win for the four other Class Is, which have all spoken against the proposed merger. On Friday evening, Canadian National praised the STB’s decision.
“A stronger record will allow the Board to determine whether the proposed transaction is in the public-interest and whether the time and scope limited measures offered by the applicants satisfy the requirement to enhance competition,” CN officials wrote in a statement. “As noted earlier, applicants had refused information critical to understand their perspective on anticipated competitive harms and inform the Board’s public-interest and competition analyses. The Board rightly found that applicants needed to provide that information. CN looks forward to participating robustly once UP-NS has submitted a complete application and encourages customers to file their notices of intent to participate so they can stay informed and continue to participate in the STB’s process.”
— Justin Franz
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