CP and KCS submit their meger application to the STB

From Canadian Pacific:

Canadian Pacific Railway Limited (TSX: CP, NYSE: CP) ("CP") and Kansas City Southern (NYSE: KSU) ("KCS") today announced they have jointly filed a railroad control application with the Surface Transportation Board ("STB") regarding the proposed transaction to create Canadian Pacific Kansas City ("CPKC"), the only single-line railroad linking the United States, Mexico, and Canada.

https://www.cpr.ca/en/media/canadian-pa ... rk-linking

The application has not been uploaded on the STB's website as of the writing of this post.

The press release is mostly comprised of standard fluffy marketing speak from both railroads; however, it does contain some specific details present in the application:

The creation of more than 1,000 direct new jobs system-wide, including approximately 760 in the United States, over the next three years brought about by expanded rail operations across the combined network.

Capital investments in new infrastructure of more than USD$275 million[1] over the next three years to improve rail safety and capacity of the core north-south CPKC mainline between Louisiana and the Upper Midwest.

Avoidance of more than 1.5 million tons of greenhouse gas (GHG) emissions within five years due to the improved efficiency of CPKC versus current operations.

Diverting 64,000 long-haul truck shipments to rail annually with new CPKC intermodal services, eliminating another 1.3 million tons of GHG emissions over the next two decades, saving $750 million in highway maintenance costs.

Those 750 new jobs and that USD$275 million are mostly going to be concentrated along the ex-MILW line between Chicago, Illinois, and Kansas City, Missouri, and the original-KCS line between Kansas City, Missouri, and Shreveport. Louisiana. Creel has already said these lines will be upgraded from 40mph to 60mph. 60mph through the Ozarks? I don't see that being possible in a lot of places... I assume the bulk of the remaining 250 new jobs will be management-related. My main concern is how is the new CPKC going to fill those jobs when we have a massive labor shortage?

The review is expected to be completed in the second half of 2022 and the merger would occur shortly thereafter; however, I think a more realistic date would be the end of 2022 due to unforeseen issues.

Not certain if this "independent agency", the Federal Trade Commission, which has the same standing on the Executive Branch orgsnizational chart as does Amtrak, could have any "say" regarding CPKC, or PAR-CSX.

The concern I have is that the Chairwoman, appointed by Joe and confirmed by the Senate, is anti-combination according to this Journal article:

https://www.wsj.com/articles/lina-khan- ... 1637073000

Fair Use:

President Biden tapped the 32-year-old Ms. Khan in June to lead the five-member FTC. She aims to challenge more corporate mergers and allegedly monopolistic practices, as well as adopt regulations to head off what she sees as unfair business tactics.

So if the fate of these two combinations (mergers) are within the sole jurisdiction of Pete and Joe, then I'd say no concern. But if somehow the FTC is some kind of "supernumerary" in such matters, then I defer to anyone here holding credentials such as a Master's Public Administration.

As a holder of such credential: Colonel, Sir; thoughts?

As far as I can tell Mr. Norman, the STB is the agency with the final say over railroad mergers. I know the DOJ does have input, and the FTC probably does as well, but I do not know to what extent.

I know there have been some who believe the "activist STB" will deny both CSX-PAR and CP-KCS because of their new found pro-competitive stance. While I could see CSX-PAR being denied over the PAS issue, I do not see the STB denying CP-KCS simply because of it's strictly end-to-end nature. "Pro-competitive" does not automatically mean "anti-merger." I could see the STB resurrecting the old "DT&I conditions" requiring the merged railroad to keep open all gateways with "fair" rates.