Kansas City Southern Lines is on board with Canadian Pacific Railway Limited’s planned merger, creating the first rail network to stretch from Canada down to Mexico.
Canadian Pacific Railway announced its plan to acquire the Missouri-based rail company, which operates railroads in Mexico, Panama, and the United States, in a statement on Sunday. The new agreement will result in the first-ever rail network to span the length of the North American continent.
“This transaction will be transformative for North America, providing significant positive impacts for our respective employees, customers, communities, and shareholders,” Canadian Pacific Railway President and CEO Keith Creel said. “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.”
THE CEO OF THE ASSOCIATION OF AMERICAN RAILROADS TALKS CLIMATE CHANGE AND INFRASTRUCTURE
The Canadian corporation valued KCS at $29 billion and agreed to assume $3.8 billion of the company’s outstanding debts as part of the agreement.
Patrick Ottensmeyer, president and CEO of KCS, praised the opportunity to join with a Canada-based company in creating a larger multinational service.
“KCS employees will benefit from being part of a truly North American continental enterprise, which creates a strong platform for revenue growth, capital investment, and future job creation. Customers, labor partners, and shareholders will all benefit from the inherent strengths of this combination, including attractive synergies and complementary routes,” he said.
The proposal was praised by politicians representing Canadian’s Alberta province, with Alberta Premier Jason Kenney celebrating the companies for combining without cutting jobs.
“If approved, this transaction will be good news for Alberta’s economy, expanding one of our largest employers while increasing shipping access to our largest export customers,” he wrote on Twitter.
Doug Schweitzer, who serves as the ministry of jobs, economy, and innovation of Alberta, agreed, saying the merger will “strengthen a major employer in Alberta and provide further shipping options.”
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The deal, which was approved by the boards of both companies, awaits final approval from the U.S. Surface Transportation Board.
