CALGARY – Canadian Pacific is seeking an advance ruling from a key U.S. agency that can block its plan to merge with Norfolk Southern.
The Calgary-based railway company (TSX:CP) said Tuesday it will ask the U.S. Surface Transportation Board for a declaration on the viability of a voting trust that CP has suggested as part of its merger plan for Norfolk Southern.
Norfolk Southern has rejected CP Rail’s overtures on several occasions.
The Virginia-based company said on Feb. 9 that one of the reasons for its objection was the lack of a declaratory order from the Surface Transportation Board that would clarify the likelihood of regulatory approval for the proposed voting trust.
CP chief executive Hunter Harrison told analysts in January that the company was reviewing its strategy after failing to anticipate that politics would overtake the regulatory review process.
Canadian Pacific has argued that combining the two companies — both under a new company controlled by the voting trust — would create North America’s largest railway, improve performance and generate about US$1.8 billion in annual costs savings.
