On Monday, the S&P 500 was up another 0.35% while Toronto was down 0.1% as oil prices were marginally lower.
Berkshire Hathaway and Questar Energy jointly canceled Berkshire’s previously agreed purchase for $1.3 billion of the Dominion pipeline. This is no big deal for Berkshire. But it was canceled becasue President Biden signed an executive order meant to curtail certain large mergers in the pipeline and transportation segments. This could definitely affect CN Rail’s proposed takeover of Kansas City Southern. I’m surprised that CN shares did not fall on the news. CN probably remains a long-term buy but I am concerned about this development. Apparently Biden specifically mentioned rail mergers.
And shares in Kansas City did fall on the news last week. My understanding is that if the deal does not go through, CN will have paid about $1 billion in break fees (part to CP, part to Kansas City for nothing. Not good. But presumably the rail road analysts have looked at this and judged that CN’s shares were still good value. The impact of the Biden order is too specialized of an area for me to know which way it will turn out or even have much of a guess. At the moment I would not be a buyer of CN until this settles out a bit more. But I also don’t plan to sell the shares I hold.