Union Pacific and CN sign agreement to expand customer options in merger

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3▲2 ▼1Impact / 5
Summary · why it matters

Union Pacific and CN have signed a binding memorandum of understanding that establishes a framework for CN to gain competitive access as part of Union Pacific's proposed merger with Norfolk Southern. Under the settlement, which is subject to Surface Transportation Board approval and merger completion, CN will acquire Norfolk Southern's stakes in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis, obtain new Midwest access through overhead rights between Tuscola, Illinois, and East St. Louis, Illinois, and gain rights to serve customers between St. Louis, Missouri, and Kansas City, Missouri, including use of Union Pacific's Neff Yard for a first-time presence in the heart of Kansas City. CN also agrees not to oppose the Union Pacific-Norfolk Southern merger, and both parties will work together through the STB process to implement the agreement. Union Pacific CEO Jim Vena said the settlement reinforces commitments to preserve and strengthen competitive options, while CN CEO Tracy Robinson said the framework would preserve competitive access to key markets and position CN to continue offering reliable options across North America.

Impact on assets 3

Industrials± Mixed · 3 stocks
Union Pacific Corporation
UNP
▲ PositiveRegulationrelevance

Union Pacific secures CN's non-opposition to its merger with Norfolk Southern, smoothing regulatory approval.

Norfolk Southern Corporation
NSC
▼ NegativeCompetitionrelevance

Norfolk Southern loses its stakes in key terminal companies and faces increased competition from CN.

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