CP Rail, CSX Merger Talks End but CP Vows to Keep Trying

This article was last updated on April 16, 2022

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Canadian Pacific Railway Ltd. has announced to have ended all possible talks regarding a potential takeover deal with CSX Corp., highlighting that it will still continue lobbying North American railroad companies to be allowed to merge despite tough restrictions. According to the statement issued by CP on Monday, it was mentioned that “exploratory conversations held with CSX Corp. about a possible business combination have ended. No further talks are planned.”

Earlier, both CP and CSX had refrained from commenting over reports alleging that CSX had turned down the takeover offer from its smaller Canadian counterpart. CP finally revealed on Monday that it proposed “a coast-to-coast combination that would improve service, promote competition, alleviate congestion in North America – specifically the key Chicago gateway – and generate significant shareholder value.” Furthermore, it was stressed that “while regulatory concerns appear to be a major deterrent for many railroads considering combinations, CP believes that given the right structure between the right players, and having thoughtful considerations and remedies to address shipper concerns, regulatory approvals are achievable.”

In addition to that, it was highlighted that North American rail sector is battling significant challenges in moving more freight than ever and the need to move even more as oil production and crop yields. It was appreciated that consumer-demand is going to grow now and amplify existing problems unless “solutions aren’t put in place immediately.” CP alleged that “a pro-competition, customer-friendly, safety-focused railway combination is one such solution that could not be ignored on its merits by regulators.”