Rejected: Update on Canadian Pacific, Norfolk Southern Proposed Merger

Norfolk Southern has rejected Canadian Pacific’s $28-billion takeover offer, saying that it is “grossly inadequate, creates substantial regulatory risks and uncertainties that are highly unlikely to be overcome, and is not in the best interest of the company and its shareholders."

The notice of rejection went on to say that “we believe that Canadian Pacific’s short-term, cut-to-the-bone strategy could cause Norfolk Southern to lose substantial revenues from our service-sensitive customer base,” and will “risks harm to vital transportation infrastructure and the communities we serve.”

Harrison replied that CP would now need to increase its offer to win Norfolk Southern’s consent. 

Of course, this is probably all negotiating bluster: Never accept the first offer, and all that. We'll see how it plays out.

Click here for my Q & A on the proposed merger.

Photo from the Travis DeWitz collection.