Canadian Pacific Makes Deal offer to CSX
The CSX has been cool to the idea of a transaction, which would create a company worth more than $60 billion, people briefed on the matter said.
If completed, a deal would unite two of the biggest railroad operators at a time when rail traffic in North America is soaring because of the energy boom, snarling Amtrak traffic and tying up other freight.
Canadian Pacific, with a market value of about $32.5 billion, has rail lines that stretch across Canada and into the United States. CSX has a market value of about $30 billion and controls a network of lines throughout the Eastern United States.
CSX shareholders would most likely expect a significant premium for their shares and Canadian Pacific appears emboldened after its shares have risen 25 percent this year.
Much of the North American railroad network has been weighed down by mismanagement, and part of the logic behind uniting Canadian Pacific with CSX is that a combined company would help relieve congestion by streamlining certain crucial routes, people briefed on the deal say
Mr. Harrison said that deal-making at this scale was difficult. “My experience in the past, and I’ve had too much of it, it’s more about social and egos than it is true bottom-line value to the shareholder,” he said.
He said that consolidation would help ease congestion in the United States. “M.&A. makes sense in the U.S.,” he said.
Source: NYT- Canadian Pacific Makes Deal offer to CSX
