CN criticizes Union Pacific-Norfolk Southern merger application

Canadian National Railway Company (TSX: CNR) (NYSE: CNI) stated it continues reviewing Union Pacific and Norfolk Southern's amended merger application submitted to the Surface Transportation Board and will remain engaged in the regulatory process.

CN said the applicants failed to address competitive harms despite the Surface Transportation Board's encouragement to do so. The company stated the amended application does not remedy significant competitive harms or offer meaningful competitive enhancements required under new board rules.

The Montreal-based railway company disputed the applicants' characterization of their merger as end-to-end, stating competitive overlap and harms are more extensive than identified in the amended application. CN said it can provide solutions to acknowledged issues and unaddressed harms.

"Given the magnitude of this transaction, the Board's authority to impose conditions that protect competition and the public interest must be paramount," said Olivier Chouc, Senior Vice-President and Chief Legal Officer at CN.

CN noted the proposed transaction would control approximately 40% of U.S. freight rail traffic. The company called remedies outlined in the amended application inadequate, stating the applicants cannot cure deficiencies with insufficient measures.

The statement emphasized that the Surface Transportation Board's mandate to impose necessary conditions protecting competition and public interest is non-negotiable.

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