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

Dr. Christine Perkins is the new superintendent of schools for the Vernon School District, effective Aug. 1. Perkins moves to the North Okanagan from the Kootenay Lake School District in Nelson. (Vernon School District photo)
Vernon School District names new superintendent

Dr. Christine Perkins moves from Kootenay Lake district to take over from the retiring Joe Rogers

Vernon Public Art Gallery executive director Dauna Kennedy and board member Kyle Britton accept a $43,400 grant from the BC Arts Council one-time StrongerBC fund amid the COVID-19 pandemic April 9, 2021. (VPAG)
$43K boost for Vernon gallery

Province backs local art gallery with one-time pandemic grant

A 46-year-old man from Armstrong died in Revelstoke hospital after being injured in the Lumby area. (File photo)
Armstrong snowmobiler dies in Revelstoke hospital

46-year-old man injured in Tsuius Mountain area of Monashees around Lumby area

Part of the massive mess left behind in a Spallumcheen rental home owned by Wes Burden, whose tenants bolted from the property in the middle of the night. Burden is now facing a hefty cleaning and repair bill as a result. (Photo submitted)
Spallumcheen landlord’s home trashed by tenants

Rooms filled with junk, garbage, human and animal feces; landlord scared to rent again

B.C. wineries are open for indoor tasting despite new provincial health regulations. Photo- 
50th Parallel Winery, Instagram.
Indoor wine tastings still allowed in B.C., not considered a ‘social gathering’

“Tasting is really just part of the retail experience. The analogy I use is you wouldn’t buy a pair of pants without trying them on.”

Burnaby MLA Raj Chouhan presides as Speaker of the B.C. legislature, which opened it spring session April 12 with a speech from the throne. THE CANADIAN PRESS
B.C. NDP promises more health care spending, business support in 2021 budget

John Horgan government to ‘carefully return to balanced budgets’

The Red Pill Rapper performs to the crowd gathered for the Rally For Food Security at Blackburn Park on Saturday, April 10, 2021. (Kristal Burgess Photography)
The Red Pill Rapper performs to the crowd gathered for the Rally For Food Security at Blackburn Park on Saturday, April 10, 2021. (Kristal Burgess Photography)
Suspicion of ‘fake news media’ makes rally uncomfortable for Salmon Arm event photographer

More than 300 people counted at city park for ‘Rally For Food Security’

A lady wears a sticker given out after receiving a COVID-19 vaccine at a clinic in Richmond, B.C., Saturday, April 10, 2021. THE CANADIAN PRESS
B.C.’s COVID-19 case count slows after last week’s peak

3,219 new cases since Friday, 18 additional deaths

North Cowichan councillor Tek Manhas did not violate the municipality’s code of conduct by posting a sexist meme on Facebook, council concludes. (File photo)
B.C. municipality to take no action against councillor who posted sexist meme

Tek Manhas’s meme doesn’t violate North Cowichan council’s code of conduct, municipality concludes

The former Summerland Asset Development Initiative building on Prairie Valley Road in Summerland was suggested as the site for a temporary transitional housing facility for the community. However, Summerland council has rejected this proposal. (John Arendt - Summerland Review)
Summerland council rejects transitional housing facility

Concerns raised about short timeline and condition of municipally-owned building

Shayla, an 8-pound black and grey Havanese, was stolen from outside a store on Banks Road on Saturday. (Contributed)
Stolen pup located, Kelowna RCMP confirms

Mounties said on April 12 that Shayla, the 8-pound, black and grey Havanese dog, has been located safe and sound

Penticton Vees continue their winning streak carrying a 5-0 win title as of Sunday night's hockey action. (Cherie Morgan/Cherie Morgan Photography)
Penticton Vees continue winning streak

Sunday night’s 6-1 win has them with five in a row since the start of the season

A sign on a shop window indicates the store is closed in Ottawa, Monday March 23, 2020. The Canadian Federation of Independent Business is raising its estimate for the number of businesses that are considering the possibility of closing permanently. THE CANADIAN PRESS/Adrian Wyld
Small business struggling amid COVID-19 pandemic looks for aid in Liberals’ budget

President Dan Kelly said it is crucial to maintain programs to help businesses to the other side of the pandemic

The National Security and Intelligence Committee of Parliamentarians says that includes attempts to steal Canadian research on COVID-19 and vaccines, and sow misinformation. (AP Photo/Esteban Felix)
Intelligence committee warns China, Russia targeting Canadian COVID-19 research

Committee also found that the terrorist threat to Canada has shifted since its last such assessment

Most Read