STB DETERMINES PROPOSED CN-WCTC MERGER A “MINOR” TRANSACTION
STB DETERMINES PROPOSED CN-WCTC MERGER A “MINOR” TRANSACTION
The U.S. Surface Transportation Board on Wednesday determined that the proposed merger of Canadian National Railway Co. and Wisconsin Central Transportation Corp. would be a “minor” transaction, and thus not blocked from consideration by a STB-imposed railroad merger moratorium.
The STB imposed the 15-month moratorium in March 2000, while the board sought to create specific requirements for future mergers. The STB is expected to release those final merger rules on June 11.
On the proposed CN-WCTC merger, the STB has established a schedule anticipating a final agency decision by Sept. 7. CN and WCTC filed a common control application with the board on April 9.
CN plan, which was approved by WCTC shareholders, is to offer $17.15 a share cash, or about $800 million, and assume $400 million in WCTC's debt.
'CN is pleased with (Wednesday's) STB ruling, and we believe the record will show that the transaction merits the agency's approval,' said Paul M. Tellier, CN's president and chief executive officer. 'The procedural schedule for this minor transaction is realistic and should give interested parties ample time to comment on it.'
Rosemont, Ill.-based WCTC is CN's largest customer and has been hauling CN freight between Superior and Chicago under a 1998 agreement. WCTC's rail system comprises about 2,800 route miles of track and trackage rights. The company's reported revenue in 2000 was $372 million.
CN, which acquired Illinois Central two years ago, said it will sell off Wisconsin Central's overseas rail properties. Those include a 42-percent stake in English, Welsh and Scottish Railways and a 24-percent stake in Trans Rail Holdings, a New Zealand rail operator.
The railroads said the merger has the support of more than 330 shippers, local governments and officials, chambers of commerce, public agencies, other railroads, and the National Industrial Transportation League, the nation's largest shippers' association.
Montreal-based CN reported 2000 revenues of $3.7 billion.