Canadian Pacific Says SMART-TD Union Calls to Reject CN Voting Trust

By Adriano Marchese

Canadian Pacific Railway Ltd. said Tuesday that North America's largest railroad operating union has submitted a letter urging the Surface Transportation Board to reject Canadian National Railway Co.'s proposed use of a voting trust.

The Canadian transcontinental freight railway owner and operator said SMART-Transportation Division opposes CN's voting trust as part of its proposal to combine with Kansas City Southern.

In the letter, SMART-TD President Jeremy Ferguson said that the approval of the CN voting trust by the Surface Transportation Board would prove risky for the railway industry, creating potential negative repercussions to its members.

"Approval of the CN voting trust proposal would harm employees of both KCS and CN due to the amount of debt CN will carry and the real possibility that the CN transaction would fail the regulatory test in the end," Mr. Ferguson said.

In contrast, the SMART-TD letter supports a rival proposal by Canadian Pacific to combine with Kansas City Southern, adding that the union anticipates growth in both rail businesses and jobs for SMART-TD members.

"CP maintains that a CP-KCS combination is the only viable class 1 merger that serves the best interests of customers and stakeholders, but also the continent's rail network to enable a new corridor of investment and capacity for the North American economy to grow," CP said.

Write to Adriano Marchese at [e-mail]

(END) Dow Jones Newswires

June 15, 2021 09:19 ET (13:19 GMT)

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