On one of the blogs I read I was surprised to read today that Union Pacific will be buying/merging/taking over KCS this spring. I find it very hard to believe due to anti-trust issues as well as there is no pressing need financially on KCS. Is this crazy rumors or is there some basis for this happening?
Well, I have no inside information, but I have three observations:
(1) A UP-KCS merger would be very nearly “dead on arrival” at STB, due to potential competitive issues. UP would have to make very substantial concessions to other railroads (mostly BNSF) to replace the lost competition to have even a chance of success. And, one has to wonder, where UP and KCS are competitors, whether UP is better off with KCS rather than with BNSF.
(2) “Antitrust” law, per se, isn’t an issue, since STB approval of a merger immunizes the merger from antitrust laws. But STB considers antitrust policy in approving or denying mergers. More importantly, STB expects the applicants in a merger to anticipate competitive issues and propose a “fix” up front to replace any significant lost competition, rather than leaving it to STB to craft a remedy. The failure of the applicants in the SFSP merger to do this is a significant reason the merger was denied. It’s also the reason that UP made a major trackage rights agreement with BNSF up front to replace lost SP competition in the UP-SP merger.
(3) If there really were a deal like this in the works, it s HIGHLY unlikely that a “blogger” would have any information on it. It would be held very tight to the vest by both companies and only a small number of absolutely essential personnel would know what’s going on.
No more bleeping mergers and break up **** and give me back my beloved Santa Fe!
I was told by a fellow aviator and signal engineer for BNSF that it stood for ‘Brand New Santa FE’.
Not too long ago I asked someone in the business about the potential of KCS as a merger partner. The answer was a blunt ‘NO WAY. They are too highly leveraged.’ Look for KCS to be in a state of financial quarantine for decades to come.
I read that Pan Am Railways is going to be buying Norfolk Southern.
I suspect that the motive power’s been roaming again…
We had a couple of “Southern Belles” here in Northern New York (on CSX) a week or so ago. They’ve headed back to warmer climes.
I’m sure that they want a warmer locale than Upstate New York right now, especially if they are dressed as the Belle on a timetable from the forties was dressed.[:)]
[quote user=“Falcon48”]
Avianwatcher:
On one of the blogs I read I was surprised to read today that Union Pacific will be buying/merging/taking over KCS this spring. I find it very hard to believe due to anti-trust issues as well as there is no pressing need financially on KCS. Is this crazy rumors or is there some basis for this happening?
Well, I have no inside information, but I have three observations:
(1) A UP-KCS merger would be very nearly “dead on arrival” at STB, due to potential competitive issues. UP would have to make very substantial concessions to other railroads (mostly BNSF) to replace the lost competition to have even a chance of success. And, one has to wonder, where UP and KCS are competitors, whether UP is better off with KCS rather than with BNSF.
(2) “Antitrust” law, per se, isn’t an issue, since STB approval of a merger immunizes the merger from antitrust laws. But STB considers antitrust policy in approving or denying mergers. More importantly, STB expects the applicants in a merger to anticipate competitive issues and propose a “fix” up front to replace any significant lost competition, rather than leaving it to STB to craft a remedy. The failure of the applicants in the SFSP merger to do this is a significant reason the merger was denied. It’s also the reason that UP made a major trackage rights agreement with BNSF up front to replace lost SP competition in the UP-SP merger.
(3) If there really were a deal like this in the works, it s HIGHLY unlikely that a “blogger” would have any information on it. It would be held very tight to the vest by both companies and only a small number of absolutely essential personnel would know what’s going on.<
Doesn’t UP have a significant ownership stake in one of the Mexican railroads (other than KCS De Mexico)?
UP has a minority interest in Ferromex.