Class I Rail Merger is Speculated

Sources of speculation of a merger of U.S.-based Burlington Northern Santa Fe (BNSF) with Canadian National (CN) were an article in the Canadian newspaper, the Globe and Mail and a new release on the web site of the United Transportation Union (UTU). It was then picked up and run on a web site (not this one).

Jumping off point for the speculation were remarks made by CN’s president and CEO, E. Hunter Harrison, at a meeting of stock analysts in New York City, in which he indicated that if there was a transaction that might make sense for the railroad – and it would have to be economical and strategic – then it would be open to such a move.

But, as a CN spokesperson pointed out, Harrison also said, “I don’t know that BNSF wants to sell their railroad. I don’t know if we want to buy them. And I don’t know what the price would be.”

Feeding fuel to the speculative fire was an article cited by the UTU in a publication of the Association of Transportation Law Professionals, in which it was suggested BNSF may have interest in acquiring Kansas City Southern, which also controls the Tex-Mex Railroad and Mexico’s TFM.

History, too, plays a part in adding to the speculation. In 2000, BNSF and CN had plans underway to merge. They were scuttled when the U.S. Federal governmental imposed a 15-month freeze on rail consolidations while new rules were to be written.

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