WASHINGTON – The U.S. Surface Transportation Board unanimously rejected the Canadian National bid to create a voting trust to buy Kansas City Southern. The decision killed the proposed $33.7 billion CN-Kansas City Southern rail merger. The decision also opened the way for CN’s rival, the Canadian Pacific, to reopen its own merger discussions with Kansas City Southern. The original CN and CP proposals were similar in creating the first North American rail network connecting Canada, the United States and Mexico. But the Surface Transportation Board objected to CN’s use of voter trust to control Kanas City Southern instead of managing it directly. A voting trust, the Board said, could tempt Canadian National to raise shipping rates to finance the merger. CN was offering 45% more per share than CP to Kanas City Southern shareholders.
Earlier: Higher CN bid wins giant rail merger battle
Earlier: Winona impact