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STB Approves CN Takeover of Iowa Northern

The STB approved CN’s acquisition but added a number of conditions to the transaction. Photo by Craig Williams. 

STB Approves CN Takeover of Iowa Northern

The U.S. Surface Transportation Board approved Canadian National’s acquisition of Iowa Northern on January 14, with conditions to ensure the combined system remains competitive with other operators. The approval came just a year after CN approached the board about the deal and six months after the STB initially planned on ruling on the matter. 

STB’s decision will be effective February 13, meaning CN can assume control of the railroad anytime after. 

Iowa Northern operates on 275 miles of former Rock Island and Chicago Great Western trackage. The railroad was first established by a group of grain elevator operators in 1984 after the Rock Island went bankrupt. The short line was then sold in 1994 to Iron Road Railways. The railroad operates a fleet of EMDs in an attractive maroon and gray paint scheme (inspired by another former Iron Road property, Canadian American). The railroad connects with CN at Waterloo, Iowa. 

During the acquisition review, the STB received several comments, including from competing railroads like Union Pacific and CPKC, which were concerned that the deal would harm competition. To address that, the STB will require CN to keep gateways open on commercially reasonable terms in perpetuity. The board also enacted a three-year oversight period; requested that the railroad develop a scheduled local service plan; and the maintenance of access to locations in current voluntary reciprocal switching tariffs.

Three of the four STB members voted in favor of the transaction with conditions, while a fourth, Chairman Robert E. Primus, voted against it. In a statement on January 14, he wrote, “While I disagree with today’s decision, as I believe this transaction will cause a substantial lessening of competition that is not outweighed by the transaction’s modest public benefits, I recognize the views of the other Board members in favor of approving this transaction,” he wrote.  “As Chairman, I will not stand in the way of a majority and bringing a conclusion to a matter before the Board.”

CN officials said the transaction would ultimately benefit shippers, employees and communities. 

“We recognize and thank the STB for its commitment to a rigorous process that has yielded the right outcome,” said CN President and CEO Tracy Robinson. “We look forward to welcoming the team at Iowa Northern Railway into our CN family of railroaders, and we are carefully preparing for a successful integration. We are excited to grow our network, offering customers, farmers and our supply chain partners with single-line access to new markets. This is an important step in our growth plan, reinforcing our commitment to providing customers with exceptional rail service and powering the economy.” —Justin Franz 

This article was posted on: January 15, 2025