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

Savanah Sanchez with a likeness of herself in a Canucks’ uniform done by her mom Jessica. (Photo by Don Bodger)
Girl’s passion for hockey knows no bounds

No games, but extensive ice time for training beneficial to Sanchez

Fuller Lake Skating Club.
Figure skating and CanSkate awards presented on the ice

Deserving individuals still recognized in pandemic season

New logo unveiled. (Submitted)
Board of Education seeking feedback on 2021-2022 budget

Public helps determine the allocation of resources

Photo collage of loved ones lost to substance use and overdose. (Photo courtesy Moms Stop The Harm)
B.C. overdose deaths still rising 5 years after public health emergency declared

Moms Stop the Harm calls on B.C. to provide safe supply in response to deadly illicit drug use

John and Jeri Wyatt hope the upcoming North Cowichan public hearing will move things along toward exclusion of the Chemainus River Campground from the Agricultural Land Reserve. (Photo by Don Bodger)
Opportunity for input on campground ALR exclusion at public hearing

Matter back on the agenda after a late reprieve in 2019 for Chemainus River Campground owners

Demonstrators at the legislature on April 14 called on the province to decriminalize drug possession and provide widespread access to regulated safe supply across B.C. (Jake Romphf/News Staff)
Rally calls for decriminalization, safe supply on 5th anniversary of overdose emergency declaration

From 2016 to the end of February, 7,072 British Columbians died due to overdose

(Government of Canada)
Liberal MP caught stark naked during House of Commons video conference

William Amos, in Quebec, appeared on the screens of his fellow members of Parliament completely naked

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature, Feb. 1, 2020. (B.C. government)
B.C.’s COVID-19 case count jumps to 1,168 Wednesday, nearly 400 in hospital

Now 120 coronavirus patients in intensive care, six more deaths

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Moss covered branches are seen in the Avatar Old Growth Forest near Port Renfrew on Vancouver Island, B.C. Thursday, Sept. 29, 2011. THE CANADIAN PRESS/Jonathan Hayward
B.C. blockades aimed at protecting old-growth forests reveal First Nation split

Two Pacheedaht chiefs say they’re ‘concerned about the increasing polarization over forestry activities’ in the territory

Richmond RCMP Chief Superintendent Will Ng said, in March, the force received a stand-out number of seven reports of incidents that appeared to have “racial undertones.” (Phil McLachlan/Capital News)
‘Racially motivated’ incidents on the rise in B.C’s 4th largest city: police

Three incidents in Richmond are currently being invested as hate crimes, says RCMP Chief Superintendent Will Ng

Commercial trucks head south towards the Pacific Highway border crossing Wednesday (April 14, 2021). The union representing Canadian border officers wants its members to be included on the frontline priority list for the COVID-19 vaccine. (Aaron Hinks photo)
CBSA officers’ union calls for vaccine priority in B.C.

Border officers at ports including, YVR and land crossings should ‘not be left behind’

(Amandalina Letterio - Capital News)
Kelowna demonstrators show support for Vancouver Island logging activists

Two Kelowna men stood atop a pedestrian bridge on Harvey Avenue to raise awareness about old-growth forests

Most Read