US: Justice Department urges rejection of CP trust plan

Canadian Pacific Railway’s proposed takeover of Norfolk Southern Railway ran into more opposition on Friday, with the US Department of Justice urging a regulator to reject preliminary approval of the $28-billion US merger.

The Justice Department called on the US Surface Transportation Board, which is reviewing the proposed union, to reject early approval of a voting trust structure that CP has put forward.

“Canadian Pacific’s voting trust proposal would compromise Norfolk Southern’s independence and effectively combine the two railroads prior to completion of the STB’s review,” said assistant attorney general Bill Baer of the Justice Department’s Antitrust Division.

“That makes no sense. We urge the STB to preserve its ability to review the impact of the proposal on competition and consumers before Canadian Pacific starts scrambling the eggs,” Baer said in a release.

Calgary-based CP has proposed putting itself into a voting trust and installing its CEO, Hunter Harrison, as head of Virginia-based Norfolk Southern while the deal is reviewed.

Full content: The Roanoke Times

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