Canadian National files with US regulator for more details on Union Pacific-Norfolk deal

Jan 12 (Reuters) - Canadian National on Monday said it filed a motion with the U.S. Surface Transportation Board seeking an order that requires Union Pacific and Norfolk Southern to disclose additional details about their proposed merger.

The $85 billion deal, announced in July, is aimed at speeding shipments by reducing handoffs and delays and would create the first U.S. coast-to-coast railroad. The proposal has drawn criticism from labor unions and rival railroads.

Union Pacific and Norfolk Southern submitted a nearly 7,000-page merger application to the board in December, kicking off a regulatory review of what would be one of the rail industry's most significant transactions in decades.

The review will likely draw intense scrutiny from the Surface Transportation Board and could take 12 to 18 months, with the companies targeting an early-2027 close.

CN said the applicants did not fully detail their assessment of the merger's competitive impact, citing incomplete market analyses, missing required market-share projections and other gaps in the filing.

"Rather than trying to convince everyone that there is 'nothing to see here', the applicants should instead be focused on meeting the rigorous and heightened standard called for by the new merger rules," CN said.

Union Pacific told Reuters in a statement that it remains confident in the merits and completeness of its application. "We will be reviewing any comments filed and working with the Surface Transportation Board as we move forward with the application process," it added.

"We expect the STB to ultimately approve the UP-NS merger, with approval conditions the wild card and UNP holding a put option in their $2.5 billion break fee," Susquehanna analyst Bascome Majors said.

BMO Capital Markets analyst Fadi Chamoun said in a note last week that while the application outlines compelling earnings and free cash flow under favorable outcomes, regulatory uncertainty remains elevated.

(Reporting by Abhinav Parmar and Apratim Sarkar in Bengaluru; Editing by Tasim Zahid)

By Abhinav Parmar