Canadian Pacific Railway Ltd. has agreed to buy Kansas City Southern in a $25 billion merger that will build the first freight-rail network connecting Mexico, the United States, and Canada.
The firms announced on Sunday that their boards of directors had agreed to a deal that values Kansas City at $275 per share in cash and shares. For each Kansas City common share owned, investors will receive 0.489 of a Canadian Pacific share and $90 in cash.
If regulators approve the merger, it will bring together two of the most important North American freight carriers, connecting Mexican manufacturing and ports, farmland and plants in the Midwest, and Canada’s ocean ports and energy resources.
The deal will need to be approved by the US Surface Transportation Board, which requires big railroad mergers to demonstrate that they are serving the public interest by increasing competition. The merger partners expect the STB review to be finished by the middle of 2022, according to the merger partners.
Canadian Pacific Kansas City, which would be renamed after the merger, would have an annual revenue of $8.7 billion and employ roughly 20,000 people. Keith Creel, the CEO of Canadian Pacific, would be in charge. About 25% of the combined entity’s shares would be owned by Kansas City investors. Continue reading
