After eight months of preparation, the Union Pacific, Missouri Pacific and Western Pacific railroads yesterday filed joint applications with the Interstate Commerce Commission seeking approval to merge into a 22,800-mile rail system spanning 21 states in the western two-thirds of the nation.
If approved by the ICC, which has 31 months to decide, the proposed merger would create the third-largest rail system in the nation, assuming that another proposed merger pending at the ICC also is approved.
The merger application comes just a few days after two other major railroads, Santa Fe Industries Inc. and the Southern Pacific Co., abandoned their previously announced plans to merge.
In their joint applications yesterday, UP, MoPac and WP said their proposed combination would improve competition among railroads and serve the shipping public more efficiently and effectively than each road could individually. With a merger, the Union Pacific and Missouri Pacific would be joined principally at Kansas City and Omaha. The smaller Western Pacific would be linked to Union Pacific at Salt Lake City. The result would offer shippers single-system service between most major West Coast ports, the growing Sun Belt markets and the Gulf Coast, the three rails told the ICC.
Right now, Union Pacific and Missouri Pacific are considered two of the nation's most efficient and profitable railroads. Under the merger proposal, both would be owned by Pacific Rail System Inc., a newly created rail management subsidiary of Union Pacific Corp. Western Pacific would become a subsidiary of Union Pacific Railroad. Union Pacific already has purchased 87 percent of Western Pacific's common stock and placed in it an independent voting trust pending the ICC decision. s
In their applications to the ICC, the railroads said the joining of the three lines created little duplication of trackage, and they did not propose any railline abandonments. John C. Kenefick, UP president, said $90 million will be spent to upgrade the Western Pacific track to handle expected traffic increases and improve service if the merger is approved.