WASHINGTON — Union Pacific and Norfolk Southern will submit their revised merger application on April 30, the railroads informed the Surface Transportation Board today.
The STB on Jan. 16 rejected the original 6,692-page application as incomplete.
The railroads initially expected to file the revised application as early as March.
Regulators pointed out that their decision “should not be read as an indication of how the Board might ultimately assess any future revised application.”
The revised application will address the three serious shortcomings the STB identified with the railroads’ Dec. 19 filing.
The board said in its 15-page decision that the application didn’t provide the required projections for post-merger market-share, failed to include the complete merger agreement between the two railroads, and did not appropriately address control of the Terminal Railroad Association of St. Louis.
The board found a disconnect between the application’s projections of extensive growth and its use of 2023 data to define the market share that would be controlled by the merged railroad. “The application does not contain future market share projections showing the combined effects of merger-related growth, diversions, and merger-influenced and other changes to market conditions that Applicants anticipate,” the board said in a press release.
“Applicants’ market impact analyses must necessarily project market shares beyond the transaction’s consummation date, and therefore that the application does not include the ‘projected market shares’ as required,” the release says.
The board also agreed with the contention made by other railroads that the application was incomplete because it did not include the entire merger agreement between UP and NS. Specifically, they said it omitted a section on the terms that would allow UP to walk away from the transaction.
The UP-NS application treated the disposition of the TRRA as a minor transaction, but the board ruled it is a significant transaction that requires more extensive review. The TRRA is jointly owned by UP, NS, BNSF Railway, Canadian National, and CSX. The merger would give UP a controlling interest, although the merger application says UP plans to divest the share that would give it control.
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