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On March 22, Canadian Pacific Railway (CP) and Kansas City Southern (KCS) began the regulatory approval process for their intended merger by submitting to the Surface Transportation Board (STB) a required prefiling notification about their intent to submit a formal application for approval of the merger and a petition to establish a procedural schedule. The prefiling notification triggers a 10-day window ending April 1 to oppose the application of a waiver exempting mergers involving KCS from the STB’s more stringent requirements for Class I railroad mergers.

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In the prefiling notification, CP and KCS stated that they anticipate filing their application for approval on or shortly after June 28, and that they will use 2019 as the base year for the impact analyses to be included in the application. They also explained that CP will place KCS’s voting interests in an independent voting trust pending the STB’s approval of the transaction. Additionally, the railroads characterized the transaction as providing many public benefits, including that the combination of the two carriers’ end-to-end networks will enhance competition against other larger Class I railroads and trucking competitors and will expand market reach for shippers.

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Interested parties have until April 1 to oppose the waiver granted in 2001 that removes transactions involving KCS from the STB’s current rules for mergers of Class I railroads that require applicants to show that a merger will enhance competition. Under the waiver, the STB’s older, less stringent merger regulations, which do not include the enhanced competition requirement, will apply.

In addition to submitting their prefiling notification, CP and KCS requested an expedited procedural schedule involving a 10-month review period between the application and the STB’s final decision, similar to the procedural schedule the STB established for the 1999 Canadian National-Illinois Central merger. The railroads propose that once the merger application is filed:

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By law, the STB must make a final decision within approximately 16 months after the application is filed.

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Karyn A. Booth 202.263.4108 <a href="mailto:Karyn.Booth@ThompsonHine.com">Karyn.Booth@ThompsonHine.com</a>

Sandra L. Brown 202.263.4101 <a href="mailto:Sandra.Brown@ThompsonHine.com">Sandra.Brown@ThompsonHine.com</a>

Jeff Moreno 202.263.4107 <a href="mailto:Jeff.Moreno@ThompsonHine.com">Jeff.Moreno@ThompsonHine.com</a>

David E. Benz 202.263.4116 <a href="mailto:David.Benz@ThompsonHine.com">David.Benz@ThompsonHine.com</a>

Kerem Bilge 202.263.4104 <a href="mailto:Kerem.Bilge@ThompsonHine.com">Kerem.Bilge@ThompsonHine.com</a>

Jason D. Tutrone 202.263.4143 <a href="mailto:Jason.Tutrone@ThompsonHine.com">Jason.Tutrone@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2022/04/Transportation_Update_-_CP_and_KCS_Submit_Merger_Prefiling_Notification_and_Proposed_Procedural_Schedule.pdf

CP and KCS Submit Merger Prefiling Notification and Proposed Procedural Schedule

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