MONTREAL/CHICAGO 3 (Reuters) - Canadian Pacific Railway Ltd (CP.TO) said on Wednesday it is looking at all legal options in response to what it described as concerted efforts by certain U.S. railroads to block its proposed merger with Norfolk Southern Corp (NSC.N).
“It is unfortunate that CP must consider the use of litigation to ensure a level playing field and protect its rights,” CP, Canada’s second-largest railroad, said in a statement.
CP’s $28 billion plan to buy Norfolk Southern has garnered support from more than 80 shippers, but is being opposed by Norfolk Southern and a number of industry groups and other rail customers.
Some U.S. railroads said on Wednesday they were not participating in any anti-competitive activities.
“CSX (CSX.O) has not been part of, nor is it aware of, any anti-competitive activities related to mergers, or otherwise, in the railroad industry,” spokeswoman Melanie Cost said by email.
A spokesman for BNSF Railway Co [BNISF.UL] declined to comment.
CP has previously raised concerns that U.S. railroads were working collectively to oppose its proposed merger with Norfolk Southern. In January, CP said in a statement that it asked the U.S. Department of Justice to “review” the actions of certain railroads “who have stated publicly that they are organizing a collective campaign” to block industry mergers.
A CP spokesman said on Wednesday that the railroad has not been in contact with the Department of Justice since sending that request.
The proposed merger, announced in November, would come under regulatory scrutiny from the Surface Transportation Board over its impact on the U.S. rail market, in particular the possibility it could spark competition-crushing rival deals, according to former regulators and analysts.
It would be the first deal reviewed by the STB since the U.S. rail regulator rewrote merger rules in 2001.
Canadian Pacific said on Wednesday that it has asked the STB for an order that would confirm the viability of a voting trust, the complex deal structure that it intends to use in its proposed takeover of Norfolk Southern. In February, CP said it would seek an STB order on the rarely used structure, which would allow Canadian Pacific and Norfolk Southern to remain independent until their merger wins regulatory approval, but yet allows the U.S. railroad’s shareholders to be paid before the deal closes.
On Tuesday, the Wall Street Journal reported that Canadian Pacific approached CSX in January about a takeover, but the railroad rebuffed CP’s advances.