Union Pacific CEO slams rivals' trackage rights requests in merger debate
Union Pacific CEO Jim Vena criticized rivals' trackage rights requests last month as the proposed UP-NS merger moves toward regulatory review. BNSF Railway requested 824 miles of trackage rights on Norfolk Southern track stretching from Chicago to intermodal facilities in eastern Pennsylvania.
The UP-NS merger agreement values the deal at $85 billion and includes a $2.5 billion breakup fee payable to Norfolk Southern if Union Pacific walks away after STB approval. BNSF also proposed creating a neutral switching carrier on the Gulf Coast to serve customer facilities of both BNSF and Union Pacific in the nation's largest chemical-producing region. The Surface Transportation Board postponed consideration of the merger to review a revised application that the railroads filed in May.
“If we allowed X railroad to run on our railroad for 800 miles, we would charge them a per car-mile charge that actually would make it more expensive for them to get to that destination,” Jim Vena, CEO of Union Pacific said.
Union Pacific had previously granted Canadian National haulage rights between Memphis and Eagle Pass, Texas, and received trackage rights over CN’s former Elgin, Joliet & Eastern bypass around Chicago. The STB approved the UP-NS merger application last month, having earlier delayed the proceeding to review a revised submission from the railroads in May.
What we know
824 miles of trackage rights requested by BNSF
$85 billion merger deal value
$2.5 billion breakup fee to Norfolk Southern
800 miles referenced in Vena's cost argument
Revised merger application submitted in May