CP, NS merger would put CSX in crosshairs: BNSF chairman

January 15, 2016


A potential merger of Canadian Pacific Railway Ltd and Norfolk Southern would make it hard for No. 3 U.S. railroad CSX Corp to survive alone and ratchet up pressure for more industry consolidation, the chairman of No. 2 U.S. railroad BNSF said on Thursday.Website Insert Turnkey Packages copy

“CSX would be at an enormous (competitive) disadvantage and so there would be another step towards consolidation,” Matt Rose told Reuters on the sidelines of the semiannual meeting of the Midwest Association of Rail Shippers.

Rose reiterated that this is not the right time for mergers as “our belief is that our customers do not want mergers to occur.” But he said if a merger of Canadian Pacific and Norfolk Southern appeared likely then BNSF, which is owned by Warren Buffett’s Berkshire Hathaway Inc, would bid for another railroad.

Canadian Pacific in mid-November disclosed its $28 billion offer to buy Norfolk Southern.

Norfolk Southern has spurned the Canadian railroad’s interest, setting the scene for a proxy battle. Some customers and legislators have written to the Surface Transportation Board, the regulator that would review any merger proposal, opposing the proposed deal.

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