Canadian Pacific Railway Limited (CP) and Kansas City Southern (KCS) have received the required regulatory pre-transaction control approvals from the Mexican Federal Economic Competition Commission (COFECE) and the Mexican Federal Telecommunications Institute (IFT) for their proposed merger.
“This important milestone marks the next step on our path to creating the first single-line rail network linking the US, Mexico and Canada,” said Keith Creel, CP President and Chief Executive Officer. “This historic combination will add capacity to the US rail network, create new competitive transportation options, support North American economic growth, and deliver important benefits to customers, employees and the environment.”
The transaction remains subject to satisfaction of customary closing conditions, including approval from stockholders of both companies. The stockholders of CP and KCS are scheduled to vote on the proposed transaction on 8 and 10 December 2021, respectively. Provided the transaction is approved by the two companies’ stockholders, it is expected to close two business days later on 14 December.
The deal was made on 15 September when Canadian Pacific announced it would acquire KCS in a stock and cash transaction worth US$31 billion.
“We are very excited to be working with CP to bring the benefits of this end-to-end combination to fruition,” commented Patrick J. Ottensmeyer, President and Chief Executive Officer of KCS. “Together we will unlock the full potential of our networks to provide new single-line offerings and industry-best service that will dramatically expand competitive transportation options across North America.”
On 30 September 2021, the Surface Transportation Board (STB) confirmed that it has approved the use of a voting trust for the CP-KCS combination.
In August 2021, the STB reaffirmed that the pre-2001 rules would govern its review of the CP-KCS transaction.
In April 2021, the STB determined it would review the CP-KCS combination under the merger rules in existence prior to 2001 and the waiver granted to KCS in 2001 to exempt it from the 2001 merger rules. CP’s ultimate acquisition of control of KCS’ U.S. railways is subject to the approval of the STB.
The STB review of CP’s proposed control of KCS is expected to be completed in the fourth quarter of 2022.
