The top law enforcement officers from six states today urged the Surface Transportation Board to reject Union Pacific and Norfolk Southern’s revised merger application.
In a letter to the regulator, including new member Richard Kloster who was approved by the Senate last week, Montana Attorney General Austin Knudsen wrote that his group is “concerned that the application for the proposed merger between Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) remains incomplete,” and cited “underdeveloped proposals that run contrary” to the STB’s rules for major mergers.
The letter, which was also signed by attorneys general from Florida, Iowa, Kansas, North Dakota and South Dakota, added that the railroads’ filing of seven amendments to the revised application are complicating their efforts to review the transaction.
The letter noted a previous warning from red state AGs that the merger could reduce competitive options for shippers, increase costs for businesses, and raise prices for consumers.
The application does not include critical information with respect to market shares, the officials said, with data buried in appendices and back-up spreadsheets that are difficult to interpret.
The letter also points out that the updated application omits analysis of future industry consolidation and its potential effects. The officials went on to say that the partners failed to detail plans for jointly owned lines including the Kansas City Terminal Railway, the Terminal Railroad Association of St. Louis, and railcar pool TTX.
“We cannot evaluate these proposed divestitures without key terms like the buyers, price, and closing conditions,” the letter stated. “Many shippers in our states send or receive goods that travel by rail through these gateways and/or using rail equipment that is part of shared pools. Any harm to the neutrality and competitive fairness of these joint assets could have a material negative impact on our states, and clarity regarding how these resources are protected is paramount for a full review of the proposed blockbuster deal.”
The letter comes after the May 8 deadline for comments set by the STB, which is expected to rule on the application this week. The officials blamed the volume of submissions by UP-NS for their own tardiness, and asked the regulator to waive the deadline.
Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.
Read more articles by Stuart Chirls here.
Related coverage:
Short line rail hits T&I truck benefits, costly safety mandates
AAR slams “hypocrisy” as Trump-backed rail safety measure is included in transportation funding bill
UP CEO confident rail merger application checks all the STB’s boxes
OmniTrax tabs Hoskins to lead transload
The post Attorney Generals urge STB to reject new rail merger application appeared first on FreightWaves.
