Western Railroad Discussion > what will be the next mega merger?

i love to speculate. i love what if and what would happen. so in the next 20 years what will happen. will we see bnsf merge with ns or csx. will kcs acquire cp and make the first north American railroad to go from mexico to canada. or will up turn the whole country yellow.

lets have fun

With the current attitude at the Department of Justice and at the FRA. There will be no major mergers anytime soon.

Redneck4449.I must agree with PHall.I think we are merged out at this time.And i don't see any new mergers in the forseesble future if at all.

I'm betting on a NS-KCS merger being the next big one. Once NS realizes that the US government won't allow a merger between any of the big six, they'll snatch the KCS. NS already owns a stake in the Meridian - Dalles corridor, but owning the rest of the KCS will give it a line haul of Gulf Coast - NE chemical traffic and access to Mexico. NS connects with the KCS at Meridian and Kansas City with no overlap, so a merger would be straight forward.

Ted Curphey
Ontario, OR

Not gonna happen, as the fads would call it a monopoly and everyone else filing anti-trust suits againse it. 20 Years from now, things will still be the same exept the lesser class II railroads might vanish in mergers, but thats about it.

Just my opinion:

1) I believe Warren Buffet will sell BNSF and make a gigantic profit. I don't beleive he bought BNSF with the intent to operate and collect the profits (if any). I see BNSF being sold to NS or CSX, then UP will have no option other than merge or buy whichever eastern railroad didn't buy BNSF.

2) KCS will be gobbled up by someone within only a few years.

3) Within 20 years, there will be 2 super large Class 1's in the U.S., and a bunch of shortlines and regionals taking over the less profitable routes. CP and CN will continue to battle in Canada, with somewhat of a limited presence inside the U.S.

Please remember, I am no expert nor have any information to support my theories. Just something to think about.

I believe CP will acquire KCS, to combat CN in the US midwest to Gulf.

Just imagine the headlines, UP and BNSF merge! ......YA RIGHT lol

funnelfan sez:
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> I'm betting on a NS-KCS merger being the next big
> one. Once NS realizes that the US government won't
> allow a merger between any of the big six, they'll
> snatch the KCS. NS already owns a stake in the
> Meridian - Dalles corridor, but owning the rest of
> the KCS will give it a line haul of Gulf Coast -
> NE chemical traffic and access to Mexico. NS
> connects with the KCS at Meridian and Kansas City
> with no overlap, so a merger would be straight
> forward.

Completely agree. Except I'm not sure this could be called a mega-merger.



Edited 1 time(s). Last edit at 01/13/12 22:14 by billio.

There are many rumors of these mega-mergers, however, there are laws that prevent these kind of mergers from ever happening. The most recent one I heard was BNSF going after CP. But of course that did not happen. Then before was BNSF and NS then UP and CSX, creating two competing railroads.

- John

John Crisanti
Longmont, CO

Come on... BNSF

Is it any more obvious???

Mr. MRL

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if the lines or routes don't overlap then a very good chance a merger will be ok'd by stb.

i'd say csx/bnsf would have a 90% of being granted because the don't have any overlapping routes. i'd give it the same with up, except for the old c&ei they may have to give track rights to ns or cp.

ns and up or bnsf would be a little different because ns has lines in mo but could be worked out.

also remember this in 1970 when the bn was formed the icc(stb) denied the merger, but the bn appealed it to the us supreme court and the granted the merger, so if that merger can be ok'd then the others can be too.

look what getting ready to take place in the airline industry? delta and usair are getting ready to carve up the assets of american, so that will leave only united, delta and usair as major airlines left in the usa

Here's an idea. UP buys out the rest of Ferromex/Ferrosur (it already owns 26%). In turn, BNSF merges with KCS/KCSM. This way, you still have two Western US/Mexican competitors. CSX merges with CP and NS merges with CN. This way you still have two Eastern US/Canadian competitors.

Andrew

I agree with Ted. KCS has north-south emphasis in the Midwest with the Mexico connection which seems to me to be good fit. There is only minor route overlapping which should keep the Justice Department at bay. These are not competing lines for the most part so, unlike Delta and American airlines, it would have a pretty good chance of succeeding.

The question which is the elephant in the room is is there a clear advantage to shareholders of either of these companies that operate successfully in their respective markets?

Only KCS can be a merger target and not with the biggies!

San Francisco zoo railroad will merge with Niles Canyon RR.

underscore Wrote:
-------------------------------------------------------

>
> look what getting ready to take place in the
> airline industry? delta and usair are getting
> ready to carve up the assets of american, so that
> will leave only united, delta and usair as major
> airlines left in the usa


Southwest is actually the largest carrier of intra-U.S. passengers.

While I certainly agree AA needs to be put out of its misery, I doubt that Justice would allow DL and US to carve it up by themselves.

I agree with the comments regarding "merger", it looks more like CP is going to be acquired
and divided amongst the highest bidders.

rehunn Wrote:
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> I agree with the comments regarding "merger", it
> looks more like CP is going to be acquired
> and divided amongst the highest bidders.


CP might seek a friendly merger to avoid the clutches of Ackman, and shareholders who expect better stock performance.

But, the Canadian precedent is to block mergers of "national champions" which would move control elsewhere. The government blocked a generous offer for Potash Corporation on just those grounds.

I don't know if CP has enough cash / financing power to carry off a purchase of KCS or NS though. I doubt it

Wasn't UP interested in the CP at one time? Dan