Canadian Pacific Railway (CP - Get Report) late Tuesday launched a second bid to consolidate the North American rail industry, going public with a proposal to combine with Norfolk Southern (NS - Get Report) .
Calgary-based CP said it sent a letter to Norfolk Southern's board proposing a combination that would create a transcontinental railroad "with the scale and reach to deliver improved levels of service" to customers. Norfolk Southern offered no immediate comment on the proposal, which did not contain deal terms other than promising a "sizable premium" to current valuations.
The move comes barely a year after CP went public with an offer for Norfolk Southern rival CSX (CSX - Get Report) after that company rejected private overtures. Canadian Pacific eventually walked away from that bid, which CSX criticized as unlikely to win regulatory approval, but has made it clear that it still advocates rail consolidation.
The public nature of the letter suggests Canadian Pacific might be receiving similar pushback from Norfolk Southern. The company said in its statement it believes the combination would offer better service "and satisfy the U.S. Surface Transportation Board and Canadian regulators."
CP has said consolidation is necessary because railroads are unable to expand the capacity of existing tracks, causing bottlenecks that can only be solved via better cooperation between competitors.