KANSAS CITY, Mo. — Canadian Pacific and Kansas City Southern Railways have agreed to combine to create the first U.S., Mexico and Canada rail network.
Canadian Pacific will acquire KC Southern in a stock and cash transaction valued at approximately $29 Billion.
Although the pairing will still be the smallest of six U.S. Class railroads by revenue, the combined networks new single-line will include approximately 20,000 miles of rail, employ close to 20,000 people and generate total revenues of approximately $8.7 Billion.
The merger must still receive final approval from the Surface Transportation Board. The first step in the merger is expected to be completed in the second half of 2021, and the railways are expected to merge by the middle of 2022.
Canadian Pacific President and Chief Executive Officer, Keith Creel, is expected to serve as the Chief Executive Officer of the combined company, which will be named Canadian Pacific Kansas City (CPKC).
Calgary will be the global headquarters of CPKC, and Kansas City, Missouri, will be designated as the U.S. headquarters. The Mexico headquarters will remain in Mexico City and Monterrey. Canadian Pacific's current U.S. headquarters in Minneapolis will remain an important base of operations.
Four KC Southern directors will join Canadian Pacific's expanded board at the appropriate time.
Canadian Pacific and Kansas City Southern will host a joint investor conference call on Sunday at 1 p.m. to discuss the announcement.
A live webcast will be available on the Canadian Pacific website and the KCS website.
