CN and Union Pacific have signed a binding Memorandum of Understanding establishing a framework for CN to secure competitive access in connection with the proposed transaction between Union Pacific and Norfolk Southern.
The settlement agreement preserves customer options and resolves terminal railroad ownership issues, while expanding CN’s presence in the Midwest and reaffirming gateway protections for all customers and railroads.
Under the settlement agreement, which is contingent on the Surface Transportation Board’s approval and closing of the merger, CN will gain access to shipper facilities where Class I railroad options would be reduced from 2-to-1 or 3-to-2, where commercially and operationally feasible. CN will also acquire Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis.
Under the deal, CN will gain new access in the Midwest through overhead rights between Tuscola, Illinois, and East St. Louis, Illinois, and rights to serve customers between St. Louis, Missouri, and Kansas City, Missouri. For the first time, CN will have a footprint in the heart of Kansas City, using Union Pacific’s Neff Yard.
CN said it will not oppose the Union Pacific-Norfolk Southern merger. Both parties will collaborate through the STB process to ensure that this agreement takes effect.