STB approves railroad merger
Canadian Pacific given the green light to take over DM&E
By Dave Hannon -- Purchasing, 10/1/2008 1:20:00 PM
After more than a year of review, the Surface Transportation Board has approved Canadian Pacific’s proposed acquisition of regional railroad Dakota, Minnesota & Eastern (DM&E) Railroad and its subsidiaries: Iowa, Chicago & Eastern Railroad and Cedar American Rail Holdings.
Canadian Pacific officials say the $1.5 billion takeover will give CP customers direct single line access to the Midwest U.S. markets and the Kansas City gateway, which will improve fluidity to and from the Southwest and Mexico.
The deal was originally proposed more than a year ago, but has been held up pending STB’s review of its impact on competition in the rail market and environmental concerns regarding DM&E’s plans to expand lines in the coal fields of the Powder River Basin of Wyoming. The STB’s approval will become effective Oct. 30 after a 30-day appeal period.
In its approval of the deal, the STB says “no shipper will lose the option of competitive rail services as a direct result of the transaction; the transaction will not result in either a substantial lessening of competition, the creation of a monopoly, or a restraint of trade in freight surface transportation in any region of the U.S.”
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