Canadian Pacific Kansas City Merger Gains STB Approval

The US Surface Transportation Board (STB) has provided approval for the merger of Canadian Pacific (CP) and Kansas City Southern (KCS), subject to certain conditions.

This decision will enable CP to exercise control of KCS to form Canadian Pacific Kansas City (CPKC) from 14 April 2023 onwards.

STB’s conditions for this merger include a seven-year oversight period to ensure CPKS mitigates environmental impacts, preserves competition, protects railroad workers and promotes efficient passenger rail.

Kansas City Southern locomotive hauls freight cars in Minnesota
Canadian Pacific Kansas City will be the only single-line railway to link the United States, Mexico and Canada

CP is now reviewing the 212-page decision in detail and says it will announce its plans in the coming days.

CP President and Chief Executive Officer Keith Creel said:

“This decision clearly recognises the many benefits of this historic combination. As the STB found, it will stimulate new competition, create jobs, lead to new investment in our rail network, and drive economic growth.

“A combined CPKC will connect North America through a unique rail network able to enhance competition, provide improved reliable rail service, take trucks off public roads and improve rail safety by expanding CP's industry-leading safety practices.”

CP completed its acquisition of KCS on 14 December 2021, and KCS shares were then placed into a voting trust.

KCS has since operated independently of CP while the US Surface Transportation Board (STB) completes its regulatory review.

In this review, STB’s core conclusions focus on the potential for the new single railway to enhance safety and the environment.

The US Surface Transportation Board (STB) said:

“The Board expects that this new single-line service will foster the growth of rail traffic, shifting approximately 64,000 truckloads annually from North America's roads to rail, and will support investment in infrastructure, service quality, and safety.”

The STB ‘s approval for this merger follows regulatory clearance from the US Committee on Foreign Investment (CFIUS) in August 2022.

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