Union Pacific Chief Executive Jim Vena is confident that the revised UP-Norfolk Southern merger application meets all of the Surface Transportation Board's requirements. The application addresses concerns raised by regulators regarding the initial filing, which was deemed incomplete due to missing information on concession requirements and control of the Terminal Railroad Association of St. Louis.
The revised application provides a detailed explanation of how Union Pacific would ensure compliance with regulatory conditions, including divestiture of trackage rights and control of the TRRA.
One key aspect of the revised application is the reduced concession threshold from $750 million to an unspecified amount, which Vena believes will not be a significant burden for the company.
The merger agreement lists a $750 million threshold that would trigger a review of whether the $85 billion deal would still make sense if push comes to shove.
Vena's confidence in the merger application is rooted in his commitment to ensuring the deal benefits Union Pacific, its investors, and the business as a whole.
If the merger is approved, UP would have a pair of K.C.-St. Louis routes, including the former Missouri Pacific via Jefferson City, Mo., and NS' former Wabash via Moberly, Mo.
The potential divestiture of one of these trackage rights is seen as a possible condition for regulatory approval, but Vena acknowledges that it may take time to complete.
Despite concerns raised by other Class I railroads, the revised application addresses how Union Pacific would ensure compliance with regulatory conditions regarding control of the TRRA.
The Surface Transportation Board has not rejected a merger application twice since the 1990s, indicating a positive trend for Union Pacific's chances of approval.
The Surface Transportation Board has not rejected a merger application twice since the 1990s, indicating a positive trend for Union Pacific.
