BUSINESS

Canadian Pacific seeking early approval of merger structure

Josh Funk The Associated Press
Published Tuesday, February 16, 2016 9:48AM EST Last Updated Tuesday, February 16, 2016 10:05AM EST

This Oct. 23, 2014 file photo shows a Norfolk Southern locomotive on Chicago's south side. (M. Spencer Green/THE CANADIAN PRESS/AP)

Text:

OMAHA, Neb. -- Canadian Pacific says it will ask federal regulators for preliminary approval of the structure of its proposed takeover of Norfolk Southern railroad.

CP CEO Hunter Harrison said Tuesday his railroad is taking this step because shareholders of both railroads recommended it.

Canadian Pacific has proposed setting up a voting trust and installing Harrison as CEO of Norfolk Southern while the deal is reviewed.

Part of the reason why Norfolk Southern has rejected all of Canadian Pacific's offers so far is because it questions whether the U.S. Surface Transportation Board would approve such a deal. No major rail mergers have been approved since regulators imposed tough rules on them in 2001.

But Norfolk Southern has also said it believes Canadian Pacific's offers remained "grossly inadequate" even as they approached $30 billion.