BNSF, CN Derail Merger Plan
The chief executive officers of Burlington Northern Santa Fe and Canadian National railroads announced they are dropping their seven-month-old plans to create the biggest railroad on the continent. The announcement came after a federal court upheld the Surface Transportation Board’s moratorium on rail mergers.
“It is not in the interests of our shareholders to assume the risks involved in waiting up to two-and-one-half years for a decision on our transaction by the regulator in the United States,” Paul M. Tellier of CN and Robert D. Krebs of BNSF said in a joint statement July 20.
The concern, especially from other railroads, was so great that the STB announced a 15-month moratorium on rail mergers to give itself time to develop new rules. STB officials believed they were facing the long-predicted “end game” of railroad mergers that would leave the continent with perhaps no more two major railroads. They worried that established rules would not suffice.
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The two railroads created a storm of controversy Dec. 20 when they announced their plan to join, end-to-end, to create a 50,000-mile system to be called North American Railways ("BNSF, CN Plan Merger," 12-27, p. 1).
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