Canadian Pacific CEO says rail deal possible
The CEO of Canadian Pacific thinks U.S. regulators would approve a well-structured railroad merger, but nothing is planned now that talks with CSX ended.
CEO Hunter Harrison said during a conference call Tuesday he doesn’t agree with the view that the Surface Transportation Board wouldn’t approve any merger.
Merging the Canadian Pacific Railway Ltd. with CSX Corp. could have improved service by routing traffic around the bottlenecks in Chicago, Harrison said.
Harrison said giving railroads access to customers on other rail networks would improve competition and increase the chances that regulators would approve such a deal.
But Harrison said Canadian Pacific officials and CSX couldn’t agree on several issues, so talks ended after several meetings.
Officials at Jacksonville, Florida-based CSX declined to comment Tuesday. CSX CEO Michael Ward said last week that regulators would likely take a cautious approach to any railroad consolidation deals because there are only seven major railroads in the U.S. and Canada: BNSF, CSX, Norfolk Southern, Union Pacific, Canadian Pacific, Canadian National and Kansas City Southern.
Canadian Pacific isn’t in talks with any other railroads, but Harrison didn’t rule out the possibility.
“Are we focusing on something else because this didn’t seem to work? No. But if somebody picks up the phone and calls us and says would you like to explore some opportunities, yes, I will listen to them. Certainly,” Harrison said.
Harrison said possible mergers with CSX, Norfolk Southern or Kansas City Southern would make the most sense because their rail networks would complement Canadian Pacific’s current reach.