News & Reviews News Wire CPKC and Iowa Interstate ask regulators to take closer look at CN-Iowa Northern deal

CPKC and Iowa Interstate ask regulators to take closer look at CN-Iowa Northern deal

By Bill Stephens | March 4, 2024

CN’s acquisition of the Iowa short line should be viewed as a significant transaction, CPKC and Iowa Interstate argue

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Freight train with seven red, gray, and yellow locomotives
Canadian National will acquire Iowa Northern Railway, the short line operating on a portion of the former Rock Island founded in 1984. Iowa Northern

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.

3 thoughts on “CPKC and Iowa Interstate ask regulators to take closer look at CN-Iowa Northern deal

  1. I’m Surprised that the Union Pacific didn’t Buy it They Like Playing Games with the CPKC Houston We Have a Problem

  2. Mr. Rice, that is very interesting.
    I think there have been enough mergers and take overs of railroads in the US. Its time to settle down for a while.

  3. I checked to see why such a large railroad would absorb such a tiny one in revenue and carloads. Someone asked me back if Iowa Northern was up on their RRF payments and did they have alot of employees at or near retirement.

    I am not versed on the mechanics of the RRF, so I will have to defer to someone more in the know.

    It is common for non-railroads with under funded pensions to offload themselves to better funded outfits if they don’t think they can ever catch up or pay the premiums to the Federal Pension Guarantee Board.

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