US: Senators raise concerns about CP Rail-Norfolk Southern proposal

Canadian Pacific Railway Ltd.’s bid to acquire Norfolk SouthernCorp. faces another obstacle as the top two members of a US Senate subcommittee for antitrust matters are raising concerns about the deal.

Sens. Mike Lee and Amy Klobuchar (D., Minn.) sent a letter to the US attorney general’s office Friday about a voting-trust plan involving Canadian Pacific’s chief executive. In the letter, the senators say the trust proposed by Canadian Pacific could limit railroad regulators’ ability to “protect competition and the public interest.”

Canadian Pacific declined to comment on the letter. Its chief executive, Hunter Harrison, said this week the company remains committed to its roughly $30 billion bid to acquire Norfolk Southern. Norfolk Southern has rebuffed the cash-and-stock bid, citing regulatory concerns and arguing the offer is too low. The offer was made public last November.

The letter is addressed to Assistant Attorney General William Baer of the Justice Department’s antitrust division, whom the senators are asking to assist in evaluating the voting trust. It was sent after Canadian Pacific on Wednesday said it had petitioned the US Surface Transportation Board, whose approval is required for rail mergers, for an order declaring that the voting-trust structure is acceptable.

Full content: The Wall Street Journal

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