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FINWIRES

CN Railway Signs Deals with Union Pacific Over Operating Rights

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Canadian National Railway Company (CNR.TO) has signed a binding memorandum of understanding with Union Pacific (Nasdaq: UNP) to improve North American rail connectivity.

The agreement expands Union Pacific's operating rights over CN's Elgin, Joliet and Eastern Railway corridor through Chicago and grants new rights to CN over Union Pacific's network between Memphis, Tennessee and Eagle Pass, Texas, to support freight movements between Canada and Mexico, according to an official statement.

Separately, the two companies signed another binding MOU to expand customer options in light of Union Pacific's transaction with Norfolk Southern (Nasdaq: NSC).

The MOU establishes a framework for CN to secure competitive access and resolves terminal railroad ownership issues while expanding CN's footprint in the Midwest.

Under the settlement agreement, CN will have access to shipper facilities where Class I railroad options would be reduced from 2-to-1 or 3-to-2; acquire Norfolk Southern's stakes in the Kansas City Terminal Railway and the Terminal Railroad Association of St. Louis; and gain new access in the Midwest through overhead rights.

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