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 Post subject: Railroad Mergers
PostPosted: Wed Nov 07, 2018 5:10 pm 

Joined: Thu May 05, 2016 6:30 pm
Posts: 171
Location: Illinois
Hi,

While reading a book in class today I read that when the Union Pacific and Southern Pacific merged, the SP was the company that survived but renamed itself to Union Pacific. This got me wondering if there were other cases like this where the surviving railroad changed its name to the "dead" company's to keep it going. Do you know of any?

Thomas

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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 5:26 pm 

Joined: Thu Aug 26, 2004 2:50 pm
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Location: Northern Illinois
When the M.St.P.& S.Ste.M., Wisconsin Central, and D.S.S.& A. merged in 1961, little South Shore was deemed to have the best corporate structure, for whatever reason, so that was the surviving corporate shell, which was re-named Soo Line Railroad.

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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 6:13 pm 

Joined: Sat Oct 17, 2015 5:55 pm
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I believe the same thing happened when Anschutz's D&RGW bought SP from the combined SPSF when the latter merger was not approved. What remained ironically for SPSF was the Santa Fe but was mostly run by SP management who stayed behind when the SP railroad went to the Rio Grande. The combined D&RGW/ SP was called "Southern Pacific Lines".


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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 8:51 pm 

Joined: Sun May 20, 2007 10:27 am
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Location: New Haven Ct area
From a practical standpoint what does it actually mean that the SP changed to the UP and UP went away? Or was it just a tax thing. Was one based in a higher tax state then the other?

One case I think is funny going on right now in aerospace is the old Hamilton Standard which became Hamilton Sundstrand, which then decided to change it's name to UTC Aerospace or UTAS for short just bought up Rockwell Collins. Apparently someone in their marketing group decided that UTAS was too boring so now I think they decided to just take the name or maybe half the name of the company they just bought and go with the new name "Collins" because apparently they some how think when an engineer over at Boeing selects a manufacturer for a multi-million $ cabin air compressor or other super expensive aircraft part that he must say "what the hell let's buy from the company with the cooler name"!

I wonder how often that happens where you but a company and take their name and retire your own?


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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 10:51 pm 

Joined: Thu Oct 24, 2013 8:30 am
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I know election day is over but I find that these mega mergers are a violation of anti-trust laws. Like the mega-mergers of the 80's and 90's like the N&W and SR should've never happened or Conrail to be broken up by NS and CSX. Efficiency is one thing but when it comes down to reducing the competition. I mean there are fewer railroads today than there they were 50 years ago. You can say it's outside competition there's some truth in that but you also have to remember with all the deregulation on the industry that lead to these mega mergers.

Tell me what do you think?


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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 11:01 pm 

Joined: Sun Oct 19, 2008 12:58 pm
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Location: Chicago USA
Not a railroad but distantly related was when Westinghouse Electric, maker of heavy electric gear and nuclear power plants bought CBS, they decided they liked that business better so they shed the electric stuff to Siemens, nukes to Toshiba (which still uses the Westinghouse name) and Thermo-King to Ingersoll-Rand. They'd dumped consumer products many years earlier. They changed the name of the company to CBS. They still license the Westinghouse name and W logo.

(Later, CBS was purchased by Viacom, business it had spun off. CBS & Viacom then split but both remain controlled by National Amusements.)


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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 11:22 pm 

Joined: Sun Aug 22, 2004 8:51 pm
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Location: Southern California
adammil1 wrote:
From a practical standpoint what does it actually mean that the SP changed to the UP and UP went away? Or was it just a tax thing. Was one based in a higher tax state then the other?
It could have been a tax thing to have the SP as the continuing corporation. I recall hearing that the Southern Pacific's incorporation papers were better than what the Union Pacific railroad had.

The Union Pacific Railroad Company is the principal operating company of the broader Union Pacific Corporation.

Makes me recall what I read about Wells Fargo bank. Over the years it was acquired several times by another and often bigger bank. But, every time the Wells Fargo name was retained for the combined bank.

The old Southwest Bell was an operating company of AT&T. Then in 1984 AT&T was required to spin off the operating companies ("baby Bells"). These "baby Bells" went their own ways and often absorbed or merged with other communication companies. Southwest Bell became SBC Communications. In time SBC acquired what was left of AT&T and then renamed itself AT&T and utilized the old AT&T logo.

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 Post subject: Re: Railroad Mergers
PostPosted: Wed Nov 07, 2018 11:43 pm 

Joined: Sun Aug 22, 2004 6:10 pm
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These name changes are standard these days. The nonrailroad company I worked for would buy another company to expand the business and end up changing everything to their name! But we had bought them, they had not bought us.
MikeN.

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 Post subject: Re: Railroad Mergers
PostPosted: Thu Nov 08, 2018 1:42 am 

Joined: Wed Oct 13, 2004 12:56 am
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Location: Northern California
The reason that the Union Pacific, a Utah corporation, chose to continue using the Southern Pacifi corporation she'll, a Deleware corporation, was that the SP had millions, maybe houdreds of millions of losses on their books. The tax law did not allow these to be transferred to the Union Pacific Corporation, so Union Pacific merged itself into the SP and changed the SP name to Union Pacific, which is now a Deleware corporation. Since UP was a profitable company, the SP loses could be used to offset their profits, resulting in a significant tax savings. Maybe as much as 30% of SP's loses could be recovered by UP doing this.


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 Post subject: Re: Railroad Mergers
PostPosted: Thu Nov 08, 2018 10:20 am 

Joined: Fri Sep 20, 2013 2:34 pm
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Also, a lot of times there are bonds and other debt that decide what company survives from a corporate point of view. Actually, many of the more modern mergers to keep the old corporations alive with the surviving company owning all (or in some weird cases a majority) of the predecessor's stock.

One example was the Missouri-Kansas-Texas. When UP acquired it, they kept the corporate entity alive for a number of years. First, Katy Industries only owned about 97% of M-K-T stock. The rest was owned by people who never accepted the exchange when Katy Industries was created. UP eventually bought them out (I personally owned a few of these shares). The second and more significant reason was that in the 1950's the M-K-T was in serious financial trouble and has failed to pay dividends on preferred stock, which allowed the preferred stockholders to place representatives on the board of directors among other penalties. The M-K-T created "payment certificates" that represented the $110 of unpaid dividends. M-K-T was limited in what it could do with any profits until these things were called in. Never a problem for M-K-T but a potential problem for UP, thus M-K-T kept its corporate existence until after up paid these things off.


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 Post subject: Re: Railroad Mergers
PostPosted: Thu Nov 08, 2018 2:20 pm 

Joined: Sun Aug 22, 2004 1:51 pm
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Location: Somewhere north of Prescott, AZ on the Santa Fe "Peavine"
steamfan765 wrote:
I know election day is over but I find that these mega mergers are a violation of anti-trust laws. Like the mega-mergers of the 80's and 90's like the N&W and SR should've never happened or Conrail to be broken up by NS and CSX. Efficiency is one thing but when it comes down to reducing the competition. I mean there are fewer railroads today than there they were 50 years ago. You can say it's outside competition there's some truth in that but you also have to remember with all the deregulation on the industry that lead to these mega mergers.

The "mega-railroads" of 2018 are seldom competing with one another. They're competing with big trucking conglomerates, small independent truckers, pipelines, ship companies, and more. Power plants being built today are deciding between building at the mine or connecting to fracking-gas pipelines, and other issues drive them away from coal.

The brisk competition is railroads competing coast-to-coast for shippers like UPS, FedEx, Maersk, Swift, etc. I have a Class One locally trying to steal from small truckers by offering "transload" to two lumber yards from a point 40 miles from the lumberyards, with the lumber yards trucking up the forklift as well as the trailers. I have seen one Class One steal carload traffic from another by giving such a great rate for one-railroad shipping from the grain source that it was worth it for the feed mills to send trucks 40 miles to a transload rather than carload delivery right to the mill.

Although there are some valid points to reduction of direct railroad-to-railroad competition, the manner of thinking described in your hypothesis is the narrow-minded thinking of those in the 1970s who were still stuck in ICC thinking and 1940s technology/marketing.


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 Post subject: Re: Railroad Mergers
PostPosted: Thu Nov 08, 2018 3:04 pm 

Joined: Sun Aug 22, 2004 8:51 pm
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Location: Southern California
Union Pacific Corporation and Union Pacific Railroad Company are both Utah corporations.

Union Pacific Corporation is the publicly held company and it was registered 2/3/1969.

Union Pacific Railroad Company was registered 11/14/1969 as Southern Pacific Transportation Company

I own some stock in the UP Corp and its 10-K says "Union Pacific Corporation was incorporated in Utah in 1969." So I looked up the above registration information from the State of Utah website.

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 Post subject: Re: Railroad Mergers
PostPosted: Thu Nov 08, 2018 3:59 pm 

Joined: Wed Oct 13, 2004 12:56 am
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Location: Northern California
Hi Brian, a quick internet search for Union Pacific Railroad Corp, 10k turned this up for me:
"Company – Union Pacific Railroad Company (the Registrant), a Class I Railroad incorporated in Delaware and an indirect wholly owned subsidiary of Union Pacific Corporation (the Corporation or UPC), together with a number of wholly owned and majority-owned subsidiaries, certain affiliates and various minority-owned ..."
However, I was originally told the story by Bob Opel, who was right in the middle of it. Next time you see Bob ask him for the details.


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 Post subject: Re: Railroad Mergers
PostPosted: Thu Nov 08, 2018 4:57 pm 

Joined: Sun Aug 22, 2004 8:51 pm
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Location: Southern California
David Johnston wrote:
Hi Brian, a quick internet search for Union Pacific Railroad Corp, 10k turned this up for me:
"Company – Union Pacific Railroad Company (the Registrant), a Class I Railroad incorporated in Delaware and an indirect wholly owned subsidiary of Union Pacific Corporation (the Corporation or UPC), together with a number of wholly owned and majority-owned subsidiaries, certain affiliates and various minority-owned ..."
However, I was originally told the story by Bob Opel, who was right in the middle of it. Next time you see Bob ask him for the details.
David, What year was that 10-K report?

I visited the SEC website and make a search for the UP Railroad and its last indexed 10-K, 10-Q or 8-K reports were in 1998. And those reports listed Utah as the State of Incorporation.

The termination of filing reports would tend to make me believe that the number of shareholders of stock in the UP Railroad Co. dropped below the quantity requiring the filing of reports with the SEC.

The UP Corporation continues to file with SEC as it is a publicly held corporation.

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