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Researched by Industrial Info Resources (Sugar Land, Texas)--Drama is afoot in the North American freight railroad industry as Canadian Pacific Railway Limited's (NYSE:CP) (CP) (Calgary, Alberta) battle to merge with Norfolk Southern Corporation (NYSE:NSC) (Norfolk, Virginia) heats up. Industrial Info is tracking nearly $2 billion in active projects by the two rail giants combined.
Industrial Info is tracking 39 Norfolk Southern projects worth $1.26 billion. Northfolk Southern's Portageville Freight Rail Bridge Replacement in Buffalo, New York has a total investment value of $70 million. The project will replace the existing iron truss rail bridge with a 900-foot steel arch, single-track rail bridge. Completion is expected by the end of 2018.
Industrial Info is tracking 21 Canadian Pacific projects worth $706.00 million. Most of the projects are tied to state- and province-wide rail system rehabilitation and upgrade programs. The railway's $6 million railyard track expansion in St. Paul, Minnesota includes lengthening six existing tracks by 3,000 feet and building a new access road to accommodate 10,000-foot trains. Completion is expected in first-quarter 2016.
Norfolk Southern, whose operations cover much of the eastern United States, has twice rejected Canadian Pacific's overtures. On Tuesday, Canadian Pacific released a revised offer, which was promptly rebuffed by Norfolk Southern.
Norfolk Southern said the revised offer was "less than the prior proposal, which the Norfolk Southern board unanimously determined was grossly inadequate..." adding the offer "creates substantial regulatory risk and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the Company and its shareholders.
On Monday, Norfolk Southern released a white paper by two former U.S. Surface Transportation Board (STB) members, which said the regulatory board was unlikely to approve Canadian Pacific's earlier merger offer. Canadian Pacific officials maintained obtaining government approval would not be a major hurdle.
Under the latest proposal, which has been valued at $30 billion, Canadian Pacific Chief Executive Officer (CEO) E. Hunter Harrison would take over as head of Norfolk Southern, while Canadian Pacific would be held in trust.
Harrison said in a conference call Tuesday that Norfolk Southern CEO James Squires was "obviously interested in keeping his job." Canadian Pacific executives maintained Harrison would be better qualified than Squires in improving Norfolk Southern's performance.
Harrison said a merged rail entity could solve infrastructure problems that now plague the railroads, and could lead to less traffic congestion at Chicago, a major rail hub. Norfolk Southern maintained the merger would instead likely increase traffic congestion in Chicago.
For related information, see November 13, 2015, article - North American Rail Earnings Mostly Down for Third-Quarter 2015.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Industrial Info is tracking 39 Norfolk Southern projects worth $1.26 billion. Northfolk Southern's Portageville Freight Rail Bridge Replacement in Buffalo, New York has a total investment value of $70 million. The project will replace the existing iron truss rail bridge with a 900-foot steel arch, single-track rail bridge. Completion is expected by the end of 2018.
Industrial Info is tracking 21 Canadian Pacific projects worth $706.00 million. Most of the projects are tied to state- and province-wide rail system rehabilitation and upgrade programs. The railway's $6 million railyard track expansion in St. Paul, Minnesota includes lengthening six existing tracks by 3,000 feet and building a new access road to accommodate 10,000-foot trains. Completion is expected in first-quarter 2016.
Norfolk Southern, whose operations cover much of the eastern United States, has twice rejected Canadian Pacific's overtures. On Tuesday, Canadian Pacific released a revised offer, which was promptly rebuffed by Norfolk Southern.
Norfolk Southern said the revised offer was "less than the prior proposal, which the Norfolk Southern board unanimously determined was grossly inadequate..." adding the offer "creates substantial regulatory risk and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the Company and its shareholders.
On Monday, Norfolk Southern released a white paper by two former U.S. Surface Transportation Board (STB) members, which said the regulatory board was unlikely to approve Canadian Pacific's earlier merger offer. Canadian Pacific officials maintained obtaining government approval would not be a major hurdle.
Under the latest proposal, which has been valued at $30 billion, Canadian Pacific Chief Executive Officer (CEO) E. Hunter Harrison would take over as head of Norfolk Southern, while Canadian Pacific would be held in trust.
Harrison said in a conference call Tuesday that Norfolk Southern CEO James Squires was "obviously interested in keeping his job." Canadian Pacific executives maintained Harrison would be better qualified than Squires in improving Norfolk Southern's performance.
Harrison said a merged rail entity could solve infrastructure problems that now plague the railroads, and could lead to less traffic congestion at Chicago, a major rail hub. Norfolk Southern maintained the merger would instead likely increase traffic congestion in Chicago.
For related information, see November 13, 2015, article - North American Rail Earnings Mostly Down for Third-Quarter 2015.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
