A Giant Rail Merger Escapes Washington’s Big Deal Crackdown

The North American railroad industry is headed for its first major consolidation since the 1990s after the US Surface Transportation Board on March 15 gave the green light to Canadian Pacific Railway Ltd.’s $31 billion merger with Kansas City Southern. These are the sixth- and seventh-largest railroads in North America by revenue, respectively, and the combined entity will still be the smallest of the major carriers.

A week before, the departments of Justice and Transportation launched an effort to block JetBlue Airways Corp.’s $7.6 billion acquisition of Spirit Airlines Inc. on the grounds that it would lead to higher prices and reduced competition. JetBlue and Spirit are the sixth- and seventh-largest US airlines by revenue, respectively. The combined entity would still lag the sales power of the four biggest US airlines. Sound familiar?