CSX Corp was reportedly taken down an offer of a merger by Canadian Pacific Railway. Company
The Calgary, Alberta-based train company reportedly offered CSX Corp a merger that would potentially bring together two of North America's largest railroad companies.
If CSX accepted the offer, the two railroad operators would have a current market value amounting to $62 billion combined and would have benefited from the North American energy boom, according to Wall Street Journal.
The bold move by Canadian Pacific is one of the company's strategic efforts to restructure its system
CSX Corp named as the third largest United States-carrier has a revenue of $30 billion. On the other hand, Canadian Pacific Railway, which is dubbed as the second biggest railway by revenue in the United States boasts of larger revenues, with a current market value of approximately $32 billion. It also had $5.5 billion in total revenue in 2013.
The two companies combined would have ownership of a total of 35, 000 railroads primarily used for delivering cargo of automobiles, consumer products, grains and more importantly, crude oil.
Aside from that, the merger would have the potential to generate $18 billion a year.
The deal, if completed, would be one of the railroad industry's biggest merger and acquisition deal, reportedly having the power to overshadow Berkshire Hathaway's offer to Burlington Northern Santa Fe Corp. worth $26 billion back in 2010.
On the other hand, the two could face bigger challenges as the U.S. Surface Transportation Board have previously meddled in the transactions concerning the railroad industry.
A proposed merger with Burlington Northern and Canadian National Railway Co. was discontinued after the U.S. STB intervened back in 2000.
Aside from that, the merger would be closely scrutinized by U.S. national-security officials in accordance to laws that are given importance like govern foreign ownership of infrastructure like railroads.
