Canadian Pacific Railway has ended its bid for its
US counterpart Norfolk Southern.
The Canadian company entered into early stage talks with Norfolk Southern — the second-largest railroad in the eastern US and valued around $25 billion — late last year.
CP is Canada’s second-largest railroad and made headlines in 2011 and 2012 when activist investor Bill Ackman acquired about 14% of its stock and uprooted the company’s board and management.
Last year, CP tried to merge with another US railway, CSX Corp, but talks failed.
Here’s the press release:
CALGARY, April 11, 2016 /PRNewswire/ – Canadian Pacific Railway Ltd. (TSX:CP) (NYSE: CP) today announced that it has terminated efforts to merge with Norfolk Southern Corp. (NS), including the withdrawal of a resolution asking NS shareholders to vote in favour of good-faith negotiations between the two companies. No further financial offers or overtures to meet with the NS board of directors are planned at this time.
CP proposed the creation of a true end-to-end railroad that would enhance competition, ease freight congestion now and into the future, improve service to shippers, better support the economy and generate significant shareholder value for both companies.
“We have long recognised that consolidation is necessary for the North American rail industry to meet the demands of a growing economy, but with no clear path to a friendly merger at this time, we will turn all of our focus and energy to serving our customers and creating long term value for CP shareholders,” said CP CEO E. Hunter Harrison.
CP has a proven approach — precision railroading — that delivers superior results for customers, employees, communities and shareholders. CP will continue to focus on providing the best service, controlling costs, optimising assets, operating safely and developing the best team of railroaders in the industry.