Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeTransportationRailCanada’s two biggest railways at odds over U.S. mega-mergerThe proposal would form the United States’ first transcontinental railway, controlling about 40% of the country’s freight trafficLast updated 2 hours ago You can save this article by registering for free here. Or sign-in if you have an account.A CN freight train rolls under the Bayridge Drive overpass in Kingston, Ont,. on June 19, 2024. Elliot Ferguson/Postmedia fileAs a massive merger of two U.S. railway giants goes before a federal regulator, Canada’s largest rail lines are now at odds over whether the deal should go ahead.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorUntil earlier this week, both Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. stood in opposition to Union Pacific Corp.’s proposed US$85-billion acquisition of Norfolk Southern Corp.If approved, the proposal would create the United States’ first transcontinental railway, controlling about 40 per cent of the country’s freight traffic.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThat joint front changed when CN agreed to drop its opposition in exchange for more access to Union Pacific’s network south of the border, particularly through several areas of the Midwest. A separate deal between the two companies, aimed at supporting freight movement between Canada and Mexico, was revealed at the same time.Tracy Robinson, CN’s chief executive, says the company had concerns around how the merger could affect its network, business and customers.“As we’ve come to this agreement, we are satisfied that we’ve mitigated much of that concern,” Robinson told analysts Friday while revealing the company’s second-quarter results.She said the deal improves the position of CN’s railway and creates new avenues for growth, allowing it to extend its reach into broader markets, something the company has “always” wanted to do.The Montreal-based railway’s stock was up slightly on Thursday following news of the deal with Union Pacific, but fell back to near where it was before the announcement by mid-Friday morning. Still, the company’s stock was up around 33 per cent compared to the beginning of the year.Canada’s second-largest railway, CPKC, continues to oppose the merger.“The Union Pacific, Norfolk Southern mega-merger is unnecessary and creates a goliath with unprecedented market power to the detriment of American businesses and workers,” a CPKC spokesperson said in an email Thursday.The Calgary-based company argues the proposed merger — which would create the Union Pacific Transcontinental Railroad — would reduce options for customers.Chris Murray, an analyst with ATB Cormark Capital Markets, said that while a possible merger south of the border raises questions for the industry, CN’s deal with Union Pacific will lead to more efficient operations for the Canadian railway.“Still early days, but certainly (this) strategically opens up a really big market for them, not only into Canada but probably into the Gulf Coast,” Murray said.He said additional filings for the merger are expected at the U.S. Surface Transportation Board in the coming weeks, a process that will take a while.“The bigger question here will be what happens to the industry if this merger goes forward?” Murray said.While Murray doesn’t believe CPKC and CN would ever merge, approval of the U.S. proposal could open the door to other mergers in the industry.“This is far from done,” Murray said.Meanwhile, CN moved more freight — and made more money doing it — than it did during the second quarter last year.“What we’re seeing here is positive,” Murray said.Canadian National earned $1.25 billion in the quarter ending June 30, up seven per cent from a year earlier, the company said Friday. It also raised its financial expectations for the year, which now assumes growth.Murray said CN performed better than anticipated despite various challenges related to trade policy, particularly tariffs on steel, aluminum and autos.“We expect that there’s an opportunity for them to see some continued improvement in coming quarters,” Murray said.The company’s revenues were up 11 per cent over last spring, to $4.75 billion. Roughly half of that increase — or $242 million — came from fuel surcharges, which covered the cost of heightened energy prices.Revenue from grain and fertilizer climbed 18 per cent to $980 million, while petroleum and chemicals rose 16 per cent to $941 million. Automotive revenue also increased 18 per cent, to $285 million.CN’s earnings per share, a widely used metric that measures a company’s profitability, also grew to $2.06, 10 per cent higher than the same time last year.CPKC will report its results for the second quarter on July 29. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.