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CN Rail’s Kansas City Southern Deal Imperiled by U.S. Rebuff

  • Agency rejects trust to pay shareholders before final approval
  • Ruling opens door for Canadian Pacific to revive merger plan
Photographer: Whitney Curtis/Bloomberg
Updated on

Canadian National Railway Co. was dealt a potentially fatal blow in its $30 billion effort to acquire Kansas City Southern as U.S. regulators rejected a plan to use a voting trust to make the purchase.

“Applicants have failed to establish that their use of a voting trust would have public benefits,” the U.S. Surface Transportation Board ruled Tuesday. Using a voting trust “would give rise to potential public interest harms relating to both competition and divestiture.”