Canadian Pacific Railway Ltd. consented to get Kansas City Southern in a merger valued at about $25 billion that would produce the first freight-rail network connecting Mexico, the U.S. and Canada.
The companies stated Sunday their boards consented to an offer that values Kansas City at $275 a share in a combination of money and stock. Kansas City financiers will get 0.489 of a Canadian Pacific share and $90 in cash for each Kansas City typical share held.
If approved by regulators, the deal would join 2 of the significant North American freight carriers, connecting factories and ports in Mexico, farms and plants in the midwestern U.S. and Canadas ocean ports and energy resources.
The transaction will require approval from the U.S. Surface Transportation Board, which needs significant railway combinations to demonstrate they are operating in the general public interest by enhancing competition. The merger partners stated they anticipate the STB review to be completed by the middle of 2022.
The combined business, to be relabelled Canadian Pacific Kansas City, would have about $8.7 billion in annual income and employ nearly 20,000 individuals. It would be run by Canadian Pacific CEO Keith Creel. Kansas City investors would own about 25% of the combined entitys shares.