CN Strongly Opposes Merger Review Decision
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Newsfilter
- Merger Review Freeze: CN commends the Surface Transportation Board (STB) for freezing the merger review of Union Pacific (UP) and Norfolk Southern (NS), emphasizing that UP and NS have failed to present a credible case, highlighting significant deficiencies in their merger application.
- Warning on Information Gaps: The STB noted that UP and NS's supplemental filing lacks necessary market share analyses and competitive enhancement measures, failing to meet public interest standards, which could lead to concentrated control over approximately 40% of U.S. freight traffic.
- Increased Competitive Risks: CN warns that the merger would reduce shipping options and increase concentration across key freight corridors, potentially creating significant downstream risks for supply chains, indicating the merger's potential harms.
- Commitment to Transparent Review: CN appreciates the STB's ongoing commitment to a thorough and transparent review process and looks forward to UP and NS providing supplemental information to meet the full legal and public interest requirements.
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Analyst Views on CNI
Wall Street analysts forecast CNI stock price to fall
15 Analyst Rating
9 Buy
6 Hold
0 Sell
Moderate Buy
Current: 118.800
Low
105.00
Averages
113.56
High
136.77
Current: 118.800
Low
105.00
Averages
113.56
High
136.77
About CNI
Canadian National Railway Company is a transportation and logistics company. The Company's services include rail, intermodal, trucking, and supply chain services. The Company’s rail services offer equipment, customs brokerage services, transloading and distribution, private car storage and others. Its intermodal container services help shippers expand their door-to-door market reach with about 23 strategically placed intermodal terminals. Its intermodal services include temperature-controlled cargo, port partnerships, logistics park, custom brokerage, transloading and distribution, and others. Its trucking services include door-to-door service, import and export dray, interline services, and specialized services. Its supply chain services offer comprehensive services across a range of industries and product types. The Company transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
CN Strongly Opposes Merger Review Decision
- Merger Review Freeze: CN commends the Surface Transportation Board (STB) for freezing the merger review of Union Pacific (UP) and Norfolk Southern (NS), emphasizing that UP and NS have failed to present a credible case, highlighting significant deficiencies in their merger application.
- Warning on Information Gaps: The STB noted that UP and NS's supplemental filing lacks necessary market share analyses and competitive enhancement measures, failing to meet public interest standards, which could lead to concentrated control over approximately 40% of U.S. freight traffic.
- Increased Competitive Risks: CN warns that the merger would reduce shipping options and increase concentration across key freight corridors, potentially creating significant downstream risks for supply chains, indicating the merger's potential harms.
- Commitment to Transparent Review: CN appreciates the STB's ongoing commitment to a thorough and transparent review process and looks forward to UP and NS providing supplemental information to meet the full legal and public interest requirements.
See More
Analysis of Bill Gates Foundation's Investment Portfolio
- Portfolio Overview: The Gates Foundation Trust manages over $31.6 billion in assets, with 63% allocated to three large-cap stocks, indicating a preference for stable returns amidst market volatility.
- Berkshire Hathaway: 26% of the trust's investments are in Berkshire Hathaway, a company with a market cap exceeding $1 trillion, providing robust financial support to the foundation through its diversified operations and consistent cash flow generation.
- Waste Management: 20% of the trust is invested in Waste Management, which not only maintains a strong position in waste collection but also shows growth potential in renewable energy and healthcare waste disposal, despite its stock performance being lackluster.
- Canadian National Railway: The trust holds 17% in Canadian National Railway, which, while facing economic challenges and stock underperformance, retains a strong transportation network and a relatively low debt ratio, offering some defensive qualities within the investment portfolio.
See More
Investment Overview of Bill & Melinda Gates Foundation
- Foundation Donations: Since 2000, the Gates Foundation has donated approximately $8.5 billion to 1,472 grantees, highlighting its significant impact on global philanthropy, although its investment decisions are managed separately from charitable activities.
- Portfolio Structure: As of the first quarter, the Gates Foundation Trust had over $31.6 billion in assets, with 63% invested in just three large-cap stocks, reflecting a preference for stable and mature companies, particularly Berkshire Hathaway.
- Role of Berkshire Hathaway: As the largest stock in the portfolio, Berkshire Hathaway boasts a market cap exceeding $1 trillion, showcasing its advantages in wealth preservation and growth, despite not growing as rapidly as pure-play AI companies.
- Challenges for Canadian National Railway: With 17% of the Gates Trust's investments in Canadian National Railway, which transports over $181 billion in goods annually, the stock has struggled due to trade tensions and economic downturns, yielding only a 1.5% gain over the past five years.
See More
Canadian National Railway's Stance on Merger Review
- Merger Review Freeze: Canadian National Railway (CN) commends the Surface Transportation Board (STB) for freezing the merger review of Union Pacific (UP) and Norfolk Southern (NS), requiring them to provide additional information, indicating that the merger application still fails to meet public interest standards and may reduce competition.
- Information Gaps: The STB highlighted significant gaps in UP and NS's amended application, including unresolved competitive harms and inadequate market share analyses, failing to present effective measures to enhance competition, which reflects a lack of clarity and detail in their merger proposal.
- Competitive Risk Warning: The STB warned that the merger could reshape the American rail network, concentrating control over approximately 40% of U.S. freight rail traffic, posing significant downstream risks to supply chains, a concern echoed by CN.
- Insufficient Remedies: The remedies proposed by UP and NS are deemed narrow and temporary, unable to offset the competitive harms of the merger, particularly as their promoted pricing program applies to only a tiny fraction of rail traffic, potentially leaving many shippers facing higher shipping costs.
See More
Investors Should Focus on Transportation Stocks
- Joby Aviation's Potential: Joby Aviation's S4 eVTOL aircraft can fly 150 miles on a single charge and reach speeds of 200 mph, with revenue projected to soar from $53 million in 2025 to $458 million by 2028, indicating significant future market potential.
- Market Support and Partnerships: Backed by major companies like Toyota, Delta Air Lines, and Uber, Joby benefits from Toyota's engineering support, Delta's integration of flights into premium tickets, and Uber's inclusion in its Uber Air platform, enhancing its competitive edge.
- Stability of Canadian National Railway: Operating a 20,000-mile rail network, Canadian National Railway is diversified across multiple sectors, with analysts forecasting an 8% CAGR in EPS from 2025 to 2028, highlighting its potential as a reliable investment.
- Challenges and Responses: Despite facing challenges such as tariff negotiations, rising oil prices, and labor disputes, Canadian National Railway's ongoing exports of oil products, grain, and fertilizer are expected to mitigate these pressures, ensuring long-term stability.
See More
CN Commits $100 Million to Prevent Homelessness Through New Initiative
- Funding Commitment: CN has announced a commitment of $100 million CAD over the next decade for its new initiative, Railroaders for Change, aimed at supporting non-profit organizations focused on early intervention and sustainable solutions to effectively tackle homelessness and strengthen community resilience.
- Community Collaboration: By partnering with the Canadian Alliance to End Homelessness, CN has pledged $1 million over two years for data-driven research, which will help communities better coordinate responses to homelessness and connect individuals to housing and support services.
- Inaugural Donations: In the Montreal area, CN has made inaugural gifts of $250,000 each to four non-profit organizations, totaling $1 million, to support programs addressing the needs of youth, women, and Indigenous peoples, helping them access critical resources and reduce reliance on emergency shelters.
- Long-term Impact: Through the Railroaders for Change initiative, CN aims not only to address homelessness through financial support but also plans to open a new funding cycle on July 1, 2026, encouraging more organizations to apply for funding, thereby creating safer and stronger environments in the communities where it operates.
See More
CN Strongly Opposes Merger Review Decision
- Merger Review Freeze: CN commends the Surface Transportation Board (STB) for freezing the merger review of Union Pacific (UP) and Norfolk Southern (NS), emphasizing that UP and NS have failed to present a credible case, highlighting significant deficiencies in their merger application.
- Warning on Information Gaps: The STB noted that UP and NS's supplemental filing lacks necessary market share analyses and competitive enhancement measures, failing to meet public interest standards, which could lead to concentrated control over approximately 40% of U.S. freight traffic.
- Increased Competitive Risks: CN warns that the merger would reduce shipping options and increase concentration across key freight corridors, potentially creating significant downstream risks for supply chains, indicating the merger's potential harms.
- Commitment to Transparent Review: CN appreciates the STB's ongoing commitment to a thorough and transparent review process and looks forward to UP and NS providing supplemental information to meet the full legal and public interest requirements.
See More
Analysis of Bill Gates Foundation's Investment Portfolio
- Portfolio Overview: The Gates Foundation Trust manages over $31.6 billion in assets, with 63% allocated to three large-cap stocks, indicating a preference for stable returns amidst market volatility.
- Berkshire Hathaway: 26% of the trust's investments are in Berkshire Hathaway, a company with a market cap exceeding $1 trillion, providing robust financial support to the foundation through its diversified operations and consistent cash flow generation.
- Waste Management: 20% of the trust is invested in Waste Management, which not only maintains a strong position in waste collection but also shows growth potential in renewable energy and healthcare waste disposal, despite its stock performance being lackluster.
- Canadian National Railway: The trust holds 17% in Canadian National Railway, which, while facing economic challenges and stock underperformance, retains a strong transportation network and a relatively low debt ratio, offering some defensive qualities within the investment portfolio.
See More
Investment Overview of Bill & Melinda Gates Foundation
- Foundation Donations: Since 2000, the Gates Foundation has donated approximately $8.5 billion to 1,472 grantees, highlighting its significant impact on global philanthropy, although its investment decisions are managed separately from charitable activities.
- Portfolio Structure: As of the first quarter, the Gates Foundation Trust had over $31.6 billion in assets, with 63% invested in just three large-cap stocks, reflecting a preference for stable and mature companies, particularly Berkshire Hathaway.
- Role of Berkshire Hathaway: As the largest stock in the portfolio, Berkshire Hathaway boasts a market cap exceeding $1 trillion, showcasing its advantages in wealth preservation and growth, despite not growing as rapidly as pure-play AI companies.
- Challenges for Canadian National Railway: With 17% of the Gates Trust's investments in Canadian National Railway, which transports over $181 billion in goods annually, the stock has struggled due to trade tensions and economic downturns, yielding only a 1.5% gain over the past five years.
See More
Canadian National Railway's Stance on Merger Review
- Merger Review Freeze: Canadian National Railway (CN) commends the Surface Transportation Board (STB) for freezing the merger review of Union Pacific (UP) and Norfolk Southern (NS), requiring them to provide additional information, indicating that the merger application still fails to meet public interest standards and may reduce competition.
- Information Gaps: The STB highlighted significant gaps in UP and NS's amended application, including unresolved competitive harms and inadequate market share analyses, failing to present effective measures to enhance competition, which reflects a lack of clarity and detail in their merger proposal.
- Competitive Risk Warning: The STB warned that the merger could reshape the American rail network, concentrating control over approximately 40% of U.S. freight rail traffic, posing significant downstream risks to supply chains, a concern echoed by CN.
- Insufficient Remedies: The remedies proposed by UP and NS are deemed narrow and temporary, unable to offset the competitive harms of the merger, particularly as their promoted pricing program applies to only a tiny fraction of rail traffic, potentially leaving many shippers facing higher shipping costs.
See More
Investors Should Focus on Transportation Stocks
- Joby Aviation's Potential: Joby Aviation's S4 eVTOL aircraft can fly 150 miles on a single charge and reach speeds of 200 mph, with revenue projected to soar from $53 million in 2025 to $458 million by 2028, indicating significant future market potential.
- Market Support and Partnerships: Backed by major companies like Toyota, Delta Air Lines, and Uber, Joby benefits from Toyota's engineering support, Delta's integration of flights into premium tickets, and Uber's inclusion in its Uber Air platform, enhancing its competitive edge.
- Stability of Canadian National Railway: Operating a 20,000-mile rail network, Canadian National Railway is diversified across multiple sectors, with analysts forecasting an 8% CAGR in EPS from 2025 to 2028, highlighting its potential as a reliable investment.
- Challenges and Responses: Despite facing challenges such as tariff negotiations, rising oil prices, and labor disputes, Canadian National Railway's ongoing exports of oil products, grain, and fertilizer are expected to mitigate these pressures, ensuring long-term stability.
See More
CN Commits $100 Million to Prevent Homelessness Through New Initiative
- Funding Commitment: CN has announced a commitment of $100 million CAD over the next decade for its new initiative, Railroaders for Change, aimed at supporting non-profit organizations focused on early intervention and sustainable solutions to effectively tackle homelessness and strengthen community resilience.
- Community Collaboration: By partnering with the Canadian Alliance to End Homelessness, CN has pledged $1 million over two years for data-driven research, which will help communities better coordinate responses to homelessness and connect individuals to housing and support services.
- Inaugural Donations: In the Montreal area, CN has made inaugural gifts of $250,000 each to four non-profit organizations, totaling $1 million, to support programs addressing the needs of youth, women, and Indigenous peoples, helping them access critical resources and reduce reliance on emergency shelters.
- Long-term Impact: Through the Railroaders for Change initiative, CN aims not only to address homelessness through financial support but also plans to open a new funding cycle on July 1, 2026, encouraging more organizations to apply for funding, thereby creating safer and stronger environments in the communities where it operates.
See More
