CP Rail, Kansas City Southern Rail merger now official

The merger between Canadian Pacific Railway Ltd. and Kansas City Southern Railroad is now official.

The merger, under Canadian Pacific’s banner in Kansas City, marks the continent’s first major rail merger in more than two decades.

It combines the smallest of North America’s seven Class 1 railroads after U.S. railroad regulators approved the $31 billion deal last month.

The green light clears the final hurdle for CP Rail to acquire KCS and create the only railroad stretching from Canada to the US and Mexico.

Martin Oberman, chairman of the US Surface Transportation Council, said in March that the combined company would speed up freight times and encourage greater competition with the five other larger railroads.

CP’s rival Canadian National Railway Co. has been fighting a long battle over the acquisition before CP finalizes the deal in December 2021. In May 2021, CN’s $33.6 billion proposal attracted KCS to abandon CP’s initial offer in August of that year, before U.S. regulators rejected CN’s proposal.

Stretching from Vancouver and St. John’s, New Hampshire to Houston and Mexico City, the new Canadian Pacific Kansas City network will operate nearly 33,000 kilometers of rail and employ nearly 20,000 people.

The company said Friday it would mark the occasion with a ceremonial final spike in Kansas City, Missouri, where the two railroads meet. It also plans to break ground on a new shipyard office that will house its U.S. operations center.

CPKC’s stake in the railroad will remain listed on the Toronto Stock Exchange and New York Stock Exchange under the ticker symbol CP and is expected to begin trading under the new name on Tuesday, the company said.

“This unrivaled CPKC network will provide new options for our customers and expand into more markets as we provide reliable rail service, get trucks off public roads and improve rail safety by extending CP’s industry-leading safety practices standards,” CPKC CEO Keith Creel, who led the acquisition of CP Rail, said in a release.

Conditions of the deal include keeping connections between the CPKC system and other railroads open on “commercially reasonable terms” and formally justifying any rate increases in intermodal freight above a certain level, according to US regulators.

CP Railways

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