WASHINGTON — Canadian Pacific Kansas City and Iowa Interstate on Friday asked federal regulators to designate Canadian National’s proposed acquisition of Iowa Northern as a “significant” transaction that would require a longer and more rigorous review process.
Last week the Surface Transportation Board accepted CN’s application to acquire Iowa Northern and said the $230 million deal qualifies as a minor transaction.
But CPKC and Iowa Interstate, in separate filings, said they disagree.
“CN fails to account for the significance of the region served by Iowa Northern and the over-sized competitive role that Iowa Northern plays in that region – including as a significant head-to-head competitor of CN,” CPKC argues in its filing.
In its filing, the Iowa Interstate says the CN-IANR deal would deprive shippers of a competitive alternative for the movement of ethanol, denatured alcohol, and agricultural commodities originating on the Iowa Northern bound for Chicago and beyond.
CPKC notes substantial overlap of the CN and Iowa Northern service territories in Iowa and says that would reduce rail competition in the Hawkeye State. The National Feed and Grain Association also asked the STB to consider the deal a significant transaction.
A significant transaction requires a two- to four-month pre-filing notice, an evidentiary proceeding that’s 75 days longer than that of a minor transaction, and also requires a 90-day period between close of record and a decision, compared to 45 days for a minor deal.
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