News & Reviews News Wire STB denies CPKC request to give CN’s acquisition of Iowa Northern a more thorough review

STB denies CPKC request to give CN’s acquisition of Iowa Northern a more thorough review

By Bill Stephens | April 1, 2024

Regulators say they still consider the $230 million deal a minor transaction

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Canadian National and lease locomotive with Iowa Northern locomotives on bridge
Canadian National ES44AC No. 2832 leads an Iowa Northern train at Rockford, Iowa. Chris Guss

WASHINGTON – Federal regulators have rejected Canadian Pacific Kansas City’s contention that Canadian National’s proposed acquisition of 218-mile short line Iowa Northern should be subject to a more thorough review as a “significant” transaction.

In a decision issued on Friday, the Surface Transportation Board denied CPKC’s petition that had asked the board to reconsider its classification of the acquisition as a minor transaction.

The STB must approve minor transactions unless it finds a merger would harm competition. CN says its $230 million acquisition of the 218-mile Iowa Northern will boost rail competition, divert freight off the highway, and give Iowa shippers broader access to single-line service.

But CPKC, Iowa Interstate, and the National Feed and Grain Association have raised concerns about the acquisition, saying it will harm competition. CPKC in February asked the board to review the merger as a significant transaction.

The STB said CN’s acquisition was correctly determined to be a minor deal.

“The Board also reiterates that its determination in Decision No. 1 that the transaction is classified as ‘minor’ does not mean that the Board considers this proceeding to be insignificant or of little importance,” the board said. “Indeed, although the Proposed Transaction is classified as minor, the assertions made by CPKC and IAIS warrant further and careful exploration. The Board also recognizes the importance of the region being served by these rail carriers to the U.S. agriculture industry.”

Board member Robert Primus dissented, citing concerns about potentially diminished rail competition and service.

The STB did, however, order CN and IANR to provide additional traffic and customer data; haulage, trackage rights, and interchange agreements; and points where shippers would see their rail options reduced from three to two.

3 thoughts on “STB denies CPKC request to give CN’s acquisition of Iowa Northern a more thorough review

  1. I think this purchase would decrease competition. If the CN succeeds in purchasing Iowa Northern, CN would have another route into Cedar Rapids. They probably would abandon their current route between between Manchester and Cedar Rapids Iowa. Also, the Iowa Northern line between Cedar Falls and Manly Iowa would be in danger of abandonment, since CN already has a line in the area between Cedar Falls Iowa and Glenville MN.

  2. Interesting that the STB approved this transaction on the same grounds that CPkc is trying to oppose it on. You can’t have it both ways Mr. Creel. What is good for the goose is good for the gander…

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