Will CN someday buy the ICE/DME and/or KCS?

Question

Given CN's acquisitions over the last 10 years it would seem that they might be ready to pounce again on someone and you would have to think that the Iowa, Chicago and Eastern along with sister road Dakota, Minnesota and Eastern would be a good fit for them, particularly if DME ever gets out to the Powder River Basin. And not only that, it would get CN to the Kansas City gateway to possibly link up with the Kansas City Southern (something that my brain-dead employer - CP Rail - doesn't seem to get or understand).

Answer 1

I don't see anyone buying DME anytime soon.  They are actually doing well on their own and business is steadily increasing.  The company isn't for sale.

Kent in SD

Answer 2

Perhaps KCS at some point (although KCS is becoming quite a strong railroad given its recent entry into Mexico) but, at least at present, because DM&E is a private company it is unlikely CN could takeover ownership of the regional (at least through stock buyout/majority ownership) unless the DM&E would offer itself up for sale (which is very unlikely anytime soon).  This is the very reason why (the DM&E being a privately held company) that the City of Rochester and Mayo Clinic could not obtain financial records of the railroad, despite their best efforts in doing so, as they attempted to derail the FRA loan it was seeking to build into the PRB.

It will be interesting to see if the DM&E actually makes it into the gold mine that is the PRB as supposedly they have private backers to fund the project (as they have stated) but we shall see if they actually utilize this resource which is a bit more costly than going through Uncle Sam.

Answer 3

CP Rail is far from braindead. They're spending money more on improving saftey then acquiring new assests and trackage. Given CN's number of derailments last year, fatalities, and the overall saftey record; they're the ones that are braindead. Look at how much they gross a year- it's an awful lot. Yet, they can't spend this to improve their saftey- especially in the mountainous regions.

ICE/DME is indeed a realistic target for CN. Seeing how CN bought out WC which was one of the most trusted and reliable Class 2s, DME/ICE shouldn't be a problem.

KCS is a bit out of reach in my opinion. CN may be able to buy it out, but would end up choking to death. KCS is a small Class1, but they're reliable.