Pennsylvania Democrats raise concerns over CP's Norfolk Southern bid
By Nick Carey
CHICAGO (Reuters) - Democrats from Pennsylvania's congressional delegation sent a letter to a federal rail regulator on Monday raising concerns over the possible negative impacts of a merger between Canadian Pacific and Norfolk Southern Corp.
The letter sent to the Surface Transportation Board raised concerns over the impact it could have on railroad jobs in Pennsylvania and said the merger could lead to "disinvestment" in rail infrastructure in the state.
Senator Bob Casey and five members of the U.S. House of Representatives, all Democrats, also wrote that they were deeply concerned about the voting trust structure Canadian Pacific has proposed in its bid for the No. 4 U.S. railroad.
The Canadian company in mid-November disclosed its $28 billion offer to buy the Norfolk, Virginia-based railroad.
Norfolk Southern has rejected Canadian Pacific's advances, setting the stage for a possible proxy battle.
The Surface Transportation Board would have to review a merger of the two railroads, which would be a test case since the regulator rewrote the rules for approving takeovers in 2001. The review process would include public hearings where rail customers, labor groups and elected officials would be allowed to weigh in.
In their letter, the Pennsylvania Democrats wrote that they believe the acquisition could hurt thousands of rail shippers, manufacturers and local communities, as well as rail workers, in the state, and urged a thorough review of any proposed merger.
Canadian Pacific has said that a takeover of Norfolk Southern would lead to $1.8 billion in annual savings. Continued...