Latest news with #SurfaceTransportationBoard
Reuters
a day ago
- Business
- Reuters
Union Pacific, Norfolk Southern aim to file merger application by Jan 29
WASHINGTON, July 30 (Reuters) - The Surface Transportation Board said on Wednesday that Union Pacific (UNP.N), opens new tab and Norfolk Southern (NSC.N), opens new tab have formally filed a notice of intent to combine, triggering the U.S. regulatory review process for a proposed $85 billion merger between the two major railroads. The STB said the railroads intend to file their application by January 29. Once filed, the STB will consider the application and set a schedule for the merger review that could take a total of 12 to 18 months.
Yahoo
a day ago
- Business
- Yahoo
Explainer-Union Pacific deal to buy US rail rival faces lengthy review
WASHINGTON (Reuters) -Union Pacific's proposed purchase of smaller rival rail operator Norfolk Southern will need to be approved by the Surface Transportation Board in Washington, an independent federal agency that oversees competition and other areas of importance in the rail industry. The $85 billion deal announced on Tuesday would create the nation's first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the U.S., which are issues of focus for the board. Below are details of the board and what it will examine for the Union Pacific deal. What is the Surface Transportation Board? Created in 1996, the agency reviews railroad mergers, rates, service issues and big construction projects. It replaced the Interstate Commerce Commission, which was established in 1887. STB chairman Patrick Fuchs has said he wants the agency to update the board's regulatory framework to improve competition and reduce regulatory barriers. The board rarely rejects mergers outright, but in 2021 it rejected Canadian National's plan to place Kansas City Southern in a temporary "voting trust" that would have allowed Kansas City Southern shareholders to receive the deal's consideration without having to wait for full regulatory approval. That, and a higher bid from another Canadian railroad, helped end Canadian National's bid. What is the process for a railroad merger? Approval could easily take a year or more. Applicants first file a notice saying they intend to apply for a merger approval. The application for the merger is then filed three to six months after that. The STB then will decide if it is complete or not, before opening for public comments and responses for 90 days. It could then spend another year, hold a hearing, and get rebuttals and additional filings. Once the evidence is closed, the board will typically take another 90 days to issue a written opinion that generally includes an oversight period. The Attorney General also has authority to weigh in on large railroad mergers, giving the Justice Department a potential say in the merger. What does the board usually recommend for a rail merger? The STB's approval of the acquisition of Kansas City Southern Railway Company by Canadian Pacific Railway Limited came after a seven-day hearing and included an unprecedented seven-year oversight period and contained many conditions to address environmental impacts, preserve competition, protect railroad workers, and promote efficient passenger rail. What factors will the Board look at for the Union Pacific deal? The deal is the first to be considered under rules adopted in 2001 that will "substantially increase the burden on applicants to demonstrate that a proposed transaction would be in the public interest," and would require them to show how the deal will increase competition in key areas. The board will also look at how shippers of products view the deal and its impact on unions. The largest U.S. rail union, the International Association of Sheet Metal, Air, Rail and Transportation Workers, said it intends to oppose the Union Pacific deal in proceedings before the Surface Transportation Board on Tuesday. It fears the deal could reduce worker safety and job security, and downgrade service quality. Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Explainer-Union Pacific deal to buy US rail rival faces lengthy review
WASHINGTON (Reuters) -Union Pacific's proposed purchase of smaller rival rail operator Norfolk Southern will need to be approved by the Surface Transportation Board in Washington, an independent federal agency that oversees competition and other areas of importance in the rail industry. The $85 billion deal announced on Tuesday would create the nation's first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the U.S., which are issues of focus for the board. Below are details of the board and what it will examine for the Union Pacific deal. What is the Surface Transportation Board? Created in 1996, the agency reviews railroad mergers, rates, service issues and big construction projects. It replaced the Interstate Commerce Commission, which was established in 1887. STB chairman Patrick Fuchs has said he wants the agency to update the board's regulatory framework to improve competition and reduce regulatory barriers. The board rarely rejects mergers outright, but in 2021 it rejected Canadian National's plan to place Kansas City Southern in a temporary "voting trust" that would have allowed Kansas City Southern shareholders to receive the deal's consideration without having to wait for full regulatory approval. That, and a higher bid from another Canadian railroad, helped end Canadian National's bid. What is the process for a railroad merger? Approval could easily take a year or more. Applicants first file a notice saying they intend to apply for a merger approval. The application for the merger is then filed three to six months after that. The STB then will decide if it is complete or not, before opening for public comments and responses for 90 days. It could then spend another year, hold a hearing, and get rebuttals and additional filings. Once the evidence is closed, the board will typically take another 90 days to issue a written opinion that generally includes an oversight period. The Attorney General also has authority to weigh in on large railroad mergers, giving the Justice Department a potential say in the merger. What does the board usually recommend for a rail merger? The STB's approval of the acquisition of Kansas City Southern Railway Company by Canadian Pacific Railway Limited came after a seven-day hearing and included an unprecedented seven-year oversight period and contained many conditions to address environmental impacts, preserve competition, protect railroad workers, and promote efficient passenger rail. What factors will the Board look at for the Union Pacific deal? The deal is the first to be considered under rules adopted in 2001 that will "substantially increase the burden on applicants to demonstrate that a proposed transaction would be in the public interest," and would require them to show how the deal will increase competition in key areas. The board will also look at how shippers of products view the deal and its impact on unions. The largest U.S. rail union, the International Association of Sheet Metal, Air, Rail and Transportation Workers, said it intends to oppose the Union Pacific deal in proceedings before the Surface Transportation Board on Tuesday. It fears the deal could reduce worker safety and job security, and downgrade service quality.
Reuters
2 days ago
- Business
- Reuters
Explainer: Union Pacific deal to buy US rail rival faces lengthy review
WASHINGTON, July 29 (Reuters) - Union Pacific's (UNP.N), opens new tabproposed purchase of smaller rival rail operator Norfolk Southern (NSC.N), opens new tab will need to be approved by the Surface Transportation Board in Washington, an independent federal agency that oversees competition and other areas of importance in the rail industry. The $85 billion deal announced on Tuesday would create the nation's first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the U.S., which are issues of focus for the board. Below are details of the board and what it will examine for the Union Pacific deal. What is the Surface Transportation Board? Created in 1996, the agency reviews railroad mergers, rates, service issues and big construction projects. It replaced the Interstate Commerce Commission, which was established in 1887. STB chairman Patrick Fuchs has said he wants the agency to update the board's regulatory framework to improve competition and reduce regulatory barriers. The board rarely rejects mergers outright, but in 2021 it rejected Canadian National's ( opens new tab plan to place Kansas City Southern in a temporary "voting trust" that would have allowed Kansas City Southern shareholders to receive the deal's consideration without having to wait for full regulatory approval. That, and a higher bid from another Canadian railroad, helped end Canadian National's bid. What is the process for a railroad merger? Approval could easily take a year or more. Applicants first file a notice saying they intend to apply for a merger approval. The application for the merger is then filed three to six months after that. The STB then will decide if it is complete or not, before opening for public comments and responses for 90 days. It could then spend another year, hold a hearing, and get rebuttals and additional filings. Once the evidence is closed, the board will typically take another 90 days to issue a written opinion that generally includes an oversight period. The Attorney General also has authority to weigh in on large railroad mergers, giving the Justice Department a potential say in the merger. What does the board usually recommend for a rail merger? The STB's approval of the acquisition of Kansas City Southern Railway Company by Canadian Pacific Railway Limited came after a seven-day hearing and included an unprecedented seven-year oversight period and contained many conditions to address environmental impacts, preserve competition, protect railroad workers, and promote efficient passenger rail. What factors will the Board look at for the Union Pacific deal? The deal is the first to be considered under rules adopted in 2001 that will "substantially increase the burden on applicants to demonstrate that a proposed transaction would be in the public interest," and would require them to show how the deal will increase competition in key areas. The board will also look at how shippers of products view the deal and its impact on unions. The largest U.S. rail union, the International Association of Sheet Metal, Air, Rail and Transportation Workers, said it intends to oppose the Union Pacific deal in proceedings before the Surface Transportation Board on Tuesday. It fears the deal could reduce worker safety and job security, and downgrade service quality.
The Hill
2 days ago
- Business
- The Hill
Union Pacific, Norfolk to merge, create America's first coast-to-coast railroad: What to know
The proposed merger on Tuesday of Union Pacific and Norfolk Southern would create the first coast-to-coast railroad in the United States that would be controlled by a single entity. The deal, valued at $85 billion, plans to connect 50,000 miles of tracks spanning across 43 states and the District of Columbia. The leaders hailing the project on Tuesday suggested it would dramatically transform the way supplies are transported across the country. 'Railroads have been an integral part of building America since the Industrial Revolution, and this transaction is the next step in advancing the industry,' Jim Vena, Union Pacific's CEO, said in a statement. 'Imagine seamlessly hauling steel from Pittsburgh, Pennsylvania to Colton, California and moving tomato paste from Huron, California to Fremont, Ohio. Lumber from the Pacific Northwest, plastics from the Gulf Coast, copper from Arizona and Utah, and soda ash from Wyoming,' he added. 'Right now, tens of thousands of railroaders are moving almost everything we use. You name it, and at some point, the railroad hauled it.' What's the timeline? The two companies are planning to submit an application with the Surface Transportation Board (STB) in six months. Union Pacific and Norfolk Southern are tracking a finalized transaction by early 2027, according to a release. Each entity will continue independent management until the deal is closed. Company operations are headquartered in Omaha, Neb., while Atlanta will serve as a long-term project hub. What's the financial breakdown? Union Pacific is expecting to boost its company value to $30 billion while reaping in $2.75 billion annually. The company is offering Norfolk Southern shareholders $88.82 in cash per share and one Union Pacific share to complete the deal. Norfolk Southern shareholders will maintain 27 percent ownership in the combined company. The combined company will be without a voting trust and includes a $2.5 billion reverse termination fee. What will happen to workers? Union Pacific said every union employee who wants a job in the combined company will have one in their Tuesday release. 'Our safety, network, and financial performance is among the best we've had as a company, as is our customer satisfaction. And it is from this position of strength that we embark on this transformational combination,' said Norfolk Southern CEO Mark George. 'We are confident that the power of Norfolk Southern's franchise, diversified solutions, high-quality customers and partners, as well as skilled employees, will contribute meaningfully to America's first transcontinental railroad, and to igniting rail's ability to deliver for the whole American economy today and into the future,' he added.
