Federal regulators ruled Friday they need more information from
“Today’s decision is based solely on the incompleteness of the December 19 application and should not be read as an indication of how the Board might ultimately assess any future revised application,” the STB said in a press release after the three-member panel reached a unanimous decision.
A joint application filed in December before the Surface Transportation Board argues a combined company would enhance competition in the public interest per a 2001 rule. Rival railroads argued in their own filings that the nearly 7,000-page application lacked critical details.
The board, an independent body with sweeping powers over rail mergers, will require the two companies to alert the STB by Feb. 17 of any plans to file a revised application.
If refiled, a final decision on the proposed merger could come by early 2027.
Problems With Application
The railroads claimed that a merger would meet the legal standard of enhancing competition by cutting costs and travel time to help the industry gain market share against trucking.
Their application, however, didn’t include required market share projections, according to the STB. “These market-share projections are necessary because” mergers entail “a risk that the merged carrier would acquire and exploit increased market power,” the board said in the press release.
The nearly 7,000-page document also lacks key documents related to the merger agreement between the two companies, according to the press release. “Nor do Applicants attempt to justify why they withheld these materials from the Board,” the press release adds.
A related application for control of the Terminal Railroad Association of St. Louis should classify that deal as a “significant” rather than “minor” transaction, the board said.
Union Pacific said in a statement it will provide the information the board requested.
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