The combination will create the first direct railway linking Canada, the United States and Mexico, with a network spanning 20,000 miles and approximately $8.7 billion of annual revenue. It marks the end of a high-stakes bidding war.
The $300 per share cash-and-stock deal that Canadian Pacific clinched is higher than the $275 per share cash-and-stock deal that it had secured in March to buy Kansas City Southern. That deal was scrapped when Canadian National wooed Kansas City Southern in May with a $325 per share cash-and-stock offer.
Kansas City Southern shares were little changed at $281.55 in Wednesday trading in New York.
Canadian National suffered a blow when the U.S. Surface Transportation Board (STB) rejected a temporary “voting trust” structure last month that would have allowed Kansas City Southern shareholders to receive the deal’s consideration without having to wait for full regulatory approval.
Canadian Pacific is acquiring Kansas City Southern to create the first U.S.-Mexico-Canada rail network totaling 20,000 miles of railway. (Source / Canadian Pacific Railway)