Possible KCS absorption by UP

[John_Perkowski]

Will be editing, Crossposted in union pacific.

On CNBC, Jim Cramer makes a case for Union Pacific to acquire Kansas City Southern]

A point: IF UP does what Cramer advocates, UP will be back in the common carrier passenger business ... in Panama. KCS’s franchise from the Panamanian Government to operate their national trans Isthmus railroad includes at least one RT passenger trip daily.

This post is cross linked to the UP forum, so UP folks will also post here. Everyone be civil, please.

[Backshophoss]

The UP Borg strike again,UP will have all the major rail crossings to/from old Mexico.

[Shortline614]

Slow news day eh?

Even if UP wanted to go after KCS, the STB would never allow it. BNSF would most likely outbid them anyways for KCS.

[Backshophoss]

Hope this is heard after 01/20/21 by the STB then.,Current white house occupant would shove it thru now.

[eolesen]

I'll bite with a question. Aside from the Mexico trackage, what exactly would KCS add to either the UP or BNSF?

[Gilbert B Norman]

Mr. Olesen, an N-S line Great Lakes to Gulf.

Uncle Pete wants it before SOO/CP tries to get it.

BIG problem; UP would have a monopoly both within Mexico and anything moving X-Border. Lest we forget, UP owns 49% of Ferromex - a system comprised largely of the former SP/Mexico (funny how I recall riding Guadalajara-San Blas during '75. On-line signage looked mighty, mighty "SP-ish")

Not sure to what extent the Mexican counterpart to the STB thinks about "competitive rail", but we know the US Surf Board has strongly ruled previously in favor of competition.

Finally to Mr. Backshop, should there be a new Administration Jan 20, the STB Board Members have a fixed term, i.e. they're not "White House Staffers". There are even Obama appointees still sitting. So in short, whether the Trump Administration has 81 or 1522 days remaining, I believe matters not.

[eolesen]

Prof. Norman, both UP and BNSF already have the ability to service the Great Lakes from Duluth all the way to Chicago and the Gulf all the way from Houston to New Orleans... What interest could they have in another N-S line?

CP's interest goes without saying as it would give them parity with CN. Whether or not they'd want to deal with operating in Mexico is another story altogether.

Perhaps there's an argument to have CP take on the US assets, and let BNSF go after the Mexico assets.