A Canadian Pacific Railway employee walks along the side of a locomotive in a marshalling yard in Calgary on May 16, 2012. THE CANADIAN PRESS/Jeff McIntosh

A Canadian Pacific Railway employee walks along the side of a locomotive in a marshalling yard in Calgary on May 16, 2012. THE CANADIAN PRESS/Jeff McIntosh

CP Rail signs deal to buy Kansas City Southern for US$25 billion

CEO said deal will help integrate continent’s supply chains, which has become more pressing since USMCA

Canadian Pacific Railway Limited has agreed to buy Kansas City Southern in a bid to create a rail route linking Canada, the United States and Mexico.

The two companies announced in a joint press release that CP Rail has entered into a merger agreement to acquire Kansas City Southern for approximately US$25 billion.

Under the deal, shares of Kansas City Southern will be valued at US$275 per share, representing a 23 per cent premium over Friday closing prices.

KCS shareholders will receive 0.489 of a CP share and US$90 in cash for each KCS common share held.

The merger, which has to be approved by the Surface Transportation Board, will create what the companies describe as the first rail network connecting the three North American countries.

“This transaction will be transformative for North America, providing significant positive impacts for our respective employees, customers, communities, and shareholders,” CP President and Chief Executive Officer Keith Creel said in a statement.

“This will create the first U.S.-Mexico-Canada railroad, bringing together two railroads that have been keenly focused on providing quality service to their customers to unlock the full potential of their networks. CP and KCS have been the two best performing Class 1 railroads for the past three years on a revenue growth basis.”

Creel said the deal will help integrate the continent’s supply chains — a priority that has become more pressing since the signing of the USMCA free trade agreement.

The press release said the combined company will operate more than 32,100 kilometres of rail and generate total revenues of approximately US$8.7 billion based on 2020 figures.

“In combining with CP, customers will have access to new, single-line transportation services that will provide them with the best value for their transportation dollar and a strong competitive alternative to the larger Class 1s,” said KSC President and CEO Patrick J. Ottensmeyer.

The two companies will join together in Kansas City, Mo., and will run throughout Canada and at points in the U.S. Midwest, the U.S. Northeast and points on KCS’ system throughout Mexico and the South Central U.S.

The companies said the Surface Transportation Board review is expected to be completed by the middle of 2022.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

CP Railrailway

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
65 new cases of COVID-19 in Interior Health

Overall, B.C. is seeing a decrease in COVID-19 cases

FILE - In this April 19, 2021, file photo, Keidy Ventura, 17, receives her first dose of the Pfizer COVID-19 vaccine in West New York, N.J. States across the country are dramatically scaling back their COVID-19 vaccine orders as interest in the shots wanes, putting the goal of herd immunity further out of reach. (AP Photo/Seth Wenig, File)
5 more deaths, 131 new cases of COVID-19 in Interior Health over the weekend

Those 18-years and older in high-transmission neighbourhoods can register for the vaccine

District of Clearwater meetings are open to the public. The meeting agendas and past meetings minutes can be viewed on the DOC's website. Every meeting has time allocated at the end for comments from the public.
District of Clearwater hires new chief adminstrative officer

The new CAO will arrive at the end of June.

A medical worker prepares vials of the COVID-19 vaccines, Chinese Sinopharm, left, Sputnik V, center, and Pfizer at a vaccine centre, in the Usce shopping mall in Belgrade, Serbia, Thursday, May 6, 2021. Serbian authorities are looking for incentives for people to boost vaccination that has slowed down in recent weeks amid widespread anti-vaccination and conspiracy theories in the Balkan nation. The government has also promised a payment of around 25 euros to everyone who gets vaccinated by the end of May. (AP Photo/Darko Vojinovic)
38 new COVID-19 cases, more than 335k vaccines administered in Interior Health

Interior Health also to start targeted vaccinations in high transmission neighbourhoods

FILE PHOTO
Second doses of COVID-19 vaccine will be available, as AstraZeneca supply runs low: Interior Health

Province expecting large volumes of Pfizer BioNTech as age-based cohort immunization program ramps up

A bullet hole is seen in the windshield of an RCMP vehicle approximately 4 km from Vancouver International Airport after a one person was killed during a shooting outside the international departures terminal at the airport, in Richmond, B.C., Sunday, May 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Homicide team IDs man in fatal YVR shooting as police grapple with spate of gang violence

Man, 20, charged in separate fatal shooting Burnaby over the weekend

Keith MacIntyre - BC Libertarian
Penticton’s Keith MacIntyre new leader of the B.C. Libertarian Party

The Penticton businessman was voted in by members of the party on May 8

RCMP are searching for Philip Toner, who is a 'person of interest' in the investigation of a suspicious death in Kootenay National Park last week. Photo courtesy BC RCMP.
Man sought in suspicious Kootenay death found in Lake Country

Philip Toner is a person of interest in the death of Brenda Ware

Vernon North Okanagan RCMP reported to 287 mental health calls between Jan. 1, 2021, and May 1. (Black Press files)
‘It’s not the police’s responsibility to deal with mental health calls’: Vernon RCMP

RCMP remind public to take care of mental health and well-being, while better solutions are sought

Thompson Rivers University campus is in Kamloops, B.C. (KTW file photo)
Thompson Rivers the 1st B.C. university to supply free menstrual products

The university will offer the products this September

Fraser Health is using ‘targeted’ vaccination clinics in high-risk areas of the Lower Mainland. (Fraser Health photo)
B.C.’s COVID-19 decrease continues, 515 new cases Tuesday

426 seriously ill people in hospital, up from 415 Monday

The site of Sunfest, Laketown Ranch, will be open for camping this summer. (Citizen file)
Sunfest country music bash won’t be shining on B.C. in 2021

Annual Vancouver Island Festival cancelled due to COVID-19, along with Laketown Shakedown

Tla-o-qui-aht First Nation elected chief councillor Moses Martin, who was also Chantel Moore’s grandfather, speaks to media in Port Alberni on Aug. 16, 2020, during a visit from NDP leader Jagmeet Singh following the police shooting of Chantel Moore. (Elena Rardon photo)
Mother of 2 shot by police in critical condition, says B.C. First Nation chief

Community ‘devastated’ by third member of 1,150-person Vancouver Island nation shot in less than a year

B.C. Agriculture Minister Lana Popham promotes the government’s BuyBC food program in 2019. (B.C. government)
Money running out for fresh fruit, vegetables, milk in B.C. schools

‘Looking at ways to support this type of program,’ minister says

Most Read