Federal Board OKs CN Purchase of Iowa Northern Railway
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The U.S. Surface Transportation Board on Jan. 14 issued a decision approving, with conditions and some misgivings, Canadian National Railway Co.’s request to acquire and operate Waterloo-based Iowa Northern Railway Co.’s 218-mile rail system, part of which runs through North Iowa.
The decision will be effective Feb. 13.
The majority found that the proposed transaction has potential anticompetitive impacts, but that those impacts may be sufficiently mitigated through targeted conditions, according to a press release from the board.
As a result, the board approved the proposed acquisition with a number of conditions, including several specific requirements designed to keep gateways open on commercially reasonable terms in perpetuity; compliance with several reporting requirements during a three-year oversight period established by the board; the development of a scheduled local service plan; and the maintenance of access to locations in current voluntary reciprocal switching tariffs.
With the STB approval of the CN-IANR combination, we are proud to start merging our two great companies. Together we will power the economy in Iowa and beyond. Learn more here: https://t.co/PsE6PJCDWT pic.twitter.com/z1OL6GG3JP — Canadian National (@CNRailway) January 14, 2025
However, Chairman Robert Primus dissented from the majority. In his dissent, he said on the surface the transaction appears to promise “greater access and growth for shippers along the freight rail network in east-central Iowa.”
“And yet, just a few pages in, the small and medium-sized shippers who have come to rely on IANR for superior performance, rates and customer service will discover that this transaction turns from a budding, feel-good romance into something resembling an Edgar Allan Poe novel,” he said.
Primus said that although he disagrees with the decision due to his belief that it will “cause a substantial lessening of competition that is not outweighed by the transaction’s modest public benefits,” he recognizes the views of the other board members and will not stand in the way of the majority.
The board also approved related notices of exemption for trackage rights.
Iowa Northern Railway Co. was formed in 1984 on a section of the old Chicago, Rock Island & Pacific Railroad Co. The line runs diagonally northwest to southeast from Manly to Cedar Rapids, with a branch line from Waterloo to Oelwein, and a branch line from Forest City to Belmond.
CN is one of North America’s six biggest railroads with more than 18,000 miles of track across Canada and the United States.
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CN and Iowa Northern filed an application seeking board approval on Jan. 30, 2024, for CN to acquire Iowa Northern. On the same date, Chicago, Central & Pacific Railroad Co., an indirect rail carrier subsidiary of CN, filed a verified notice of exemption seeking authority to acquire overhead and limited local trackage rights from Iowa Northern for an approximately 68.3-mile rail line between Cedar Falls Junction in Cedar Falls and Manly Yard in Worth County.
Also on Jan. 30, 2024, Iowa Northern filed a verified notice of exemption seeking authority to acquire overhead and limited local trackage rights from CCP for rail lines totaling approximately 200.9 miles in Iowa.
On Feb. 29, 2024, the Surface Transportation Board accepted the application and preliminarily determined the transactions to be minor. Several stakeholders submitted filings, including requests for certain conditions to be imposed.
