Thanks for posting, I can't wait to find out what the deal is.

 On the employee's website we had a letter stating  that CP had sent a formal letter of it's intent.Of course the details weren't shared at this time,but I still do not like the idea of a foreign railroad wanting to take over an American class 1.

 

 Is this America or Canada ! Yeah it ruffles my feathers I've been employed with the NS starting on 25 years and this isn't what the NS's dedicated employees need.

 

 American companies and politicians need to get their hands out of Americas pockets and try making money by actually working and not screwing the American worker by shipping the work,the machines and the namesakes off.

 

 Am I mad....heck yeah !

I'm sure the CP would take all of NS's track, locomotives, rolling stock and infrastructure up to Canada and use it there...

 

Before the era of mega-mergers, CP had their fingers in the Soo Line and CN in the Grand Trunk Western and Central Vermont looooong before this.

 

Rusty

Why would CP sell some of its trackage to NS, only to buy it back a few months later? 

Don

WSJ article gives a hint of the "deal". I just can't image that this deal would be approved. 

Kinda reminds me of WorldCom buying MCI and things imploding shortly thereafter.  

 

 

Somebody please elaborate on the statement, "CP and CN are Candian/Canadien in

name only."  Sounds like they do have some American executives...

Didn't a woman from NS go to the CP as a high ranking official?

Can everyone imagine the new slogan: "Leave it to Beaver"

Stephen

Rusty I'm referring in general to the way it seems to happen with any company now a days. We use to have Ironton Iron,in Ironton, Ohio that made suspension parts for Chrysler .After Diymler merged,or bought out Chrysler they came to Ironton and bought Ironton Iron and shipped all of the up to date machinery to Germany,then shut down I.I. and knocked the 100+ year old business to the ground literally. There's just a big vacant lot now.

If any of you guys read Fred Frailey's blogs on TRAINS Newswire; I think he nailed it with his two most recent posts.

In one last week he questions why an NS/CP merger would make any sense from either a cost reduction standpoint or from potential traffic growth.  In one posted I believe Monday of this week, he postulates that even if NS agrees to be bought by CP, UP and BNSF will start a bidding war for NS because neither can afford a situation whereby a single eastern carrier remains as a potential merger partner for UP or BNSF.  If one of the western carriers merged with the remaining eastern carrier, the remaining western carrier would be in a seriously weakened position.

I have to agree.  Although I firmly believe a merger between UP or BNSF and either of the eastern roads would be bad news for shippers; I must acknowledge that a merger between either of the western carriers and the two eastern carriers makes far more sense, particularly from a potential traffic growth or bottleneck elimination perspective than does NS/CP.

In any event, I simply can't see the STB approving this merger under the current review process.  Allowing this merger would uncork the bottle and set in motion the rail  merger "end game" and I doubt the board will want to go there.

Curt

Well, he's 71 yrs. old now. He was retired before and came out of retirement to run the CP.  He won't be in charge of CP forever. And of course, this will only be an issue if the NS deal goes through, which is problematic, to say the least.

Good point. The other major railroads certainly are plotting and planning strategies following this announcement. Not only are they probably considering their own bids, but it seems likely they'll weigh in with massive protest with the regulators if this moves forward, as the proposed merger would tip the applecart with respect to the market share "balance of power."  

Here is a direct link to the press release from Norfolk Southern.

 

Personally, I hope the merger does not occur.  NS has a lot of heritage here in Louisville, and it would suck to see that heritage lost in a merger with CP.

What I heard after the Illinois Central / Canadian National merger that CN was run out of Chicago.  Again with CP, Pershing Square is the lead investor and its influence determines CP's  operations. All major decisions are made in the US even if the head office is listed as a Canadian address.

 

There was talk at the local HO scale club that employees were told the name was CN not Canadian National.

 

I've seen and experienced US companies being run into the ground after being bought up by another US company.

 

Rusty

I believe that's true... I started with Canadian National (1965) and when the almost merger with BNSF took place  , CN wanted everyone to call the railway CN-Rail. I'm retired now  and don't really care however I was surprised to lean about this Harrison   fellow being   CEO  of both CN & CP at one time. I wonder if he has to get work permit to work in Canada.. Anyway here's a little info on the guy . You can have him back IMHO.  Seems he gets a nice CN-Rail pension as well.

 

https://en.wikipedia.org/wiki/E._Hunter_Harrison

Judging from thsi quote on the NS website, what do you think?

 

"

Just because it had NS power does not necessarily mean it was an NS train.

 

The big railroads today use run-through power all the time. They swap power when it's convenient and then settle up via a "horsepower/hours" calculation.

My thinking after looking at the CP financial statements..............CP current debt is over $8Billion. CP will need to more than double their debt to buy NS.   This merger is not a great idea! 

 

I still do not think the Federal government would approve this deal!

 

Regards,

Swafford

 

 

Norfolk Southern Corporation (NYSE: NSC) (“the Company&quoyr today confirmed that it has received an unsolicited, low-premium, non-binding, highly conditional indication of interest from Canadian Pacific (CP.TO) to acquire the Company for $46.72 in cash and a fixed exchange ratio of 0.348 Canadian Pacific shares per Norfolk Southern share, representing a premium of less than 10% based on closing prices today.

 

My thinking............A premium of less than 10% based on closing prices is a joke! This deal will never happen! 

I would agree.  Based on these numbers, if this happens just on these numbers, I would be genuinely surprised and shocked.

 

I'm actually surprised that CP would tender such an offer, as this is more like kicking the tires.

Per Reuters, NS has all but rejected the deal:

 

http://www.reuters.com/article...#hXJ7w8Q8QJzuTzJ6.97

In other words:

 

Much ado about nothing.

 

Say goodnight, Gracie...

 

Rusty

The headline I posted earlier has an air of insulted to it. I bet NS tells em to go pound sand

Or gravel!

The 9% premium is insulting, one would have to be desperate to take that, and NS is not desperate.

 

However, it's not over yet, the premium can be increased by CP, or other bidders could enter, and it could become a bidding war.

 

I find it interesting that CP's stock price is up 6% today, normally the aquirers price drops due to the increase in debt.

 

 

Amen to that, Brother!  Greed knows no national boundaries.

I am still waiting for a large derailment to happen again on the CN/GTW South Bend Subdivision in Michigan. There have NOT been any massive derailments for about 44 years.

 

Andrew

1- what does this have to do with the NS/CP proposal?

 

2- why are you "waiting" for a major derailment ANYWHERE?  I would think the lack of any major accidents in 44 years is a GOOD thing, especially the way the media tends to paint the railroad industry lately.

Many people have said that derailments are a common factor of railroading. They were a common factor, until the GTW employees came up with a track maintenance schedule that has prevented a catastrophe.

 

The CP, BNSF, and CSXT have not been able to prevent derailments in the past year.

 

The CN has most of their derailments in the Rocky Mountains.

 

The CP derailment in Minnesota was on a stretch of track that had been under scrutiny.

 

If all railroads will end up with derailments like the CP, I wonder how long the CN/GTW can go without incidents in Michigan.

 

Andrew

Is the CN/GTW in Michigan running the same density and type of traffic as CP, BNSF, CSX, etc.?

 

Weather, terrain, profile, traffic density all have an effect on track.  Seeing that CN is the GTW's parent road, you'd think the same operational philosophies would apply in the Rockies as in Michigan.  Trouble is, the Rocky Mountains ain't Michigan. 

 

Rusty

A large amount of the CN traffic actually originates and returns to the BNSF in the form of Unit Coal Trains, auto carrier unit trains, and unit oil trains.

 

Andrew

Can anyone identify what possible actual business benefit would be produced by combining NS and Canadian Pacific? Dump a couple of headquarters jobs, which are well-paid for now? What the heck is the point, except enrichment of a couple of creep leeches in the hedge fund world - and in fact, not even sure how they would be enriched.  It should be noted that hedge fund performance has lagged your basic S&P exchange traded fund's performance, for a couple of years.

There is no point to this proposed merger.  It does nothing to alleviate congestion in the Chicago area and wouldn't result in a measurable improvement in service on either the current CP or NS systems.

Having discussed this with a number of fellow rail shipper colleagues this past week, the conclusion is this merger has more to do with ego gratification than anything else.

Curt

 Understand the CP is wanting to expand their routes to the south due to allowing the flow of traffic at will to the Atlantic and Gulf ports like mentioned in their formal letter.

 

 By doing this they bypass a lot of hurdles that comes with making connections to get to those ports already serviced by the NS.And with the Panama Canal project in the completion stages it only intensifies the competition with CN and the other class 1's vying for that business,

 Also with the west coast initiative mostly dead (at least in the remaining days of the current administration ) this only makes a deal with an American class 1 even more important .

 

 It's all about survival .

I saw on Instagram that the merger was confirmed, but on I can't find any proof of this on the internet. Can anyone confirm this? I hope it's not true!!

     I haven't seen anything. It took around 10 years to justify Penn Central, mergers and buy-outs (especially ones of this magnitude) can't happen in a week.

http://www.cbc.ca/news/busines...n-analysis-1.3324376