http://www.railroad.net/forums/viewtopi ... 3&t=157804" onclick="window.open(this.href);return false;
In addition to the coverage noted by The Wall Street Journal over at the CSX Forum, here is coverage from The New York Times. That the two leading nationally circulated newspapers have covered this story, there must be some substance to it:
http://dealbook.nytimes.com/2014/10/12/ ... re-to-csx/" onclick="window.open(this.href);return false;
It could also provide a big victory for the activist investor William A. Ackman, who joined Canadian Pacific’s board after a contentious proxy fight and whose hedge fund, Pershing Square Capital Management, has a big stake in the company.Since BNSF/CN went nowhere, let's examine how this "Chessie and Beaver" proposal differs. The main difference I see is that BNSF/CN would have eliminated one competitive Transcon route. Agricultural shippers in the Dakota presently have competitive routings, of sorts. If SOO (CP) is not providing adequate service, then there is BNSF. A merger of those two would have left shippers without the competitive routings, again of sorts. This is not an issue with a CP/CSX combination.
Canadian Pacific, with a market value of about $32.5 billion, has rail lines that stretch across Canada and into the United States. CSX has a market value of about $30 billion and controls a network of lines throughout the Eastern United States.
With minimal geographic overlap, the two companies would have a huge combined footprint. But there are potential obstacles to a deal
Now let's look at crude; that which originates presently on the SOO would enjoy single carrier service to any East Coast refinery or transloading facility such as Albany. There would be additional opportunities to establish transloading at a Tidewater port, especially if coal traffic continues to diminish. This would become important if export restrictions on US crude were to be relaxed so that Europe would have sources other than "Vladimir the Great".
But I personally hold (but DO note the disclaimer) that the CP-KCS proposal addressed at another topic at this Forum by Engineer Spike would be a more attainable expansion into US markets for CP. The "Surf Board" (STB), in that they allowed CN/IC, would be hard pressed to disallow the other major Canadian road to establish the "T-Bone" allowed to "the other guys". But KCS represents a more arduous route to the Gulf as well as only one port (Port Arthur) where CN (IC) has two (New Orleans and Mobile). Of course, IC must compete directly with barge traffic on "Ol' Man River", but then water and pipeline traffic cannot be diverted as readily as can rail. In addition to serving Chicago over "my" MILW, KCS also has a Kansas City interchange not enjoyed by CN/IC.
The CP/CSX proposal may have no more shelf life than did CN/BNSF; but if it does it will indeed be interesting to watch.
disclaimer: author holds long positions CSX KSU UNP