By David Shepardson
(Reuters) – Democratic Senator Elizabeth Warren has urged a U.S. regulator to reject Canadian Pacific’s $31 billion deal to take management of U.S. railroad Kansas Metropolis Southern, saying it could harm competitors, immediate job losses and disrupt service, a letter seen by Reuters confirmed.
The acquisition, which mixes the sixth- and seventh-largest U.S. railroads by income, was agreed in 2021.
The deal has since closed however Kansas Metropolis shares had been transferred to a belief and the railroad should function independently till the Floor Transportation Board, which oversees U.S. freight railroads, approves the transaction.
In a letter to the board, Warren stated the deal would “scale back competitors in an already extremely consolidated market and will trigger elevated transport prices” and “may lead to important job losses and repair disruptions that negatively affect American provide chains.”
The deal would mix the railroads right into a single system referred to as Canadian Pacific Kansas Metropolis that has 20,350 miles of monitor extending from Canada to Mexico, together with about 8,600 miles in the US.
“This merger would give the brand new firm extra leverage over opponents, and has shippers frightened that they’ll be left with no different rail transport choices,” Warren wrote within the letter dated March 2.
The variety of large U.S. railroads has already shrunk to simply seven from 33 in 1980, Warren wrote.
The railroads didn’t instantly remark. The board, which is anticipated to decide earlier than the tip of the month, didn’t remark however says it opinions all feedback submitted.
Warren additionally cited the Feb. 3 derailment of a Norfolk Southern-operated practice in East Palestine, Ohio, saying it raised questions on railroad security and the affect of deregulation and cost-cutting within the trade.
Final month, Senators Dick Durbin and Tammy Duckworth requested the board to defer a choice till it completes a Chicago area affect evaluation.
(Reporting by David Shepardson, modifying by Deepa Babington)