WASHINGTON — Top legal officials in seven Republican states are asking the U.S. Department of Justice to scrutinize the proposed Union Pacific-Norfolk Southern merger.
The group of state attorneys general led by Montana’s Austin Knudsen claim that the east-west consolidation will stifle competition and increase costs for Americans.
The coalition in a letter asks Acting Assistant Attorney General Omeed Assefi to review the proposed merger to provide additional analysis as the Surface Transportation Board evaluates the transaction. The STB has the sole authority to approve or reject the $85 billion deal, but the Justice Department’s Antitrust Division weighs in on rail mergers in filings with the railroad regulator.
Union Pacific plans to file an updated merger application with the STB on April 30.
A preliminary review by the attorneys general found the companies have failed to adequately address the clear loss of horizontal competition, raising antitrust concerns, the AGs said in a press release.
“By entrenching a single rail behemoth across key east-west corridors, the deal would shackle domestic manufacturers, energy producers, and farmers with higher rates and fewer shipping options, thereby blunting their competitive edge against foreign rivals, squeezing household budgets, and weakening the supply chains that underpin our national security,” Knudsen wrote in the letter. “Accordingly, we encourage the Department of Justice Antitrust Division to carefully scrutinize the merger, applying the existing law and merger guidelines to support the Surface Transportation Board’s review of the transaction.”
The coalition said the merger — which, if approved, would shrink the number of big U.S. Class I railroads from four to three — “could reduce shipping options by limiting cooperation with other railroads for interline services, which raises questions of whether the railroad companies’ commitment to keeping connection points open for freight and railcars is truthful, given it is not enforceable.
“Although Union Pacific claims the merger will result in increased growth and efficiency, the attorneys general also highlighted the importance of DOJ’s review of the deal considering the company’s nearly decade-long decline in rail service.”
Along with Knudsen, the letter was signed by attorney generals from Iowa, Kansas, Mississippi, North Dakota, South Dakota, and Tennessee. It comes just days after Assistant Attorney General and antitrust specialist Gail Slater was reportedly forced out of her position.
— A version of this article originally appeared at FreightWaves.com. To report news or errors, contact trainsnewswire@firecrown.com.
This trains article. The coalition said.> Since when are there only 4 class 1 RRs. What about CPKC?
Seven AGs from Republican states? When and how did this become a partisan issue?
There are three opinions, none of them partisan. None of them Republican, nor Democrat. All three of these opinions have a degree of validity. Any of three can be held by reasonable people of any political stripe from left to right.
(1) Approve the merger
(2) Deny the merger
(3) Use the merger process to shake down (excuse me, not shake down, but achieve) favorable conditions to the merger
Gee folks, I’m a Republican. I honestly don’t have an informed opinion on this merger. I will leave it to those that do.
I’m thinking you should take your time to research this, your post is embarrassing to yourself.
It was made a political issue when Trump illegally fired Primus off the STB and then proceeded to have a photo op with the UP CEO, who when encouraged Trump to deploy the national guard to Memphis to protect his rail yards.
It was the further politicized by the STB chair Fuchs who sent out an email during the government shutdown blaming democrats for the shutdown in violation of the Hatch Act. Then in the rehearing for STB VC Schultz she refused to answer several questions aimed at her by Congress because she clearly felt her job was equally threatened if she didn’t fall in line with Trumps political agenda, nullifying the independent nature of the regulatory body.
The reason the author is making note that these are republicans is because they are breaking ranks for the good of their state, people and what they believe is just and legal.