Canadian Pacific, Kansas City Southern Receive Further Support for Creating First U.S.-Mexico-Canada Rail Network
Canadian Pacific Railway and Kansas City Southern announced that over 300 stakeholders, including major customers and ports, have expressed support for their planned U.S.-Mexico-Canada rail network. Key supporters, such as SSAB and the Port of New Orleans, anticipate benefits like enhanced transportation competition, access to markets, and improved service offerings. The approval process from the Surface Transportation Board is ongoing, with a completion anticipated by mid-2022. The merger aims to create a more competitive alternative in the rail sector while maintaining the smallest revenue size among major U.S. Class 1 railroads.
- Over 300 stakeholders support the CP-KCS merger, indicating strong market backing.
- Expected benefits include improved transit times and enhanced service reliability.
- The merger aims to invigorate competition in the transportation sector.
- None.
Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) ("CP") and Kansas City Southern (NYSE: KSU) ("KCS") today announced that 45 customers, ports, transloads and other stakeholders have filed statements with the Surface Transportation Board (“STB”) bringing the total to more than 300 supporting the planned creation of the first U.S.-Mexico-Canada rail network. The additional support comes from stakeholders large and small across the supply chain, including SSAB, Domtar, Farmers Cooperative of Hanska, Port of New Orleans, and E.J.R. Reload.
Similar to the customers and supporters that filed statements and letters with the STB on April 1, 2021, the new supporters stated they expect the combination would, among other benefits, invigorate transportation competition, expand access to existing and growing markets, and provide new service offerings that would improve transit times and reliability. Many of the supporters also requested the STB to review the transaction as swiftly as possible so the systems could be integrated, and the end-to-end benefits of this combination can be realized for the benefit of all stakeholders.
CP and KCS thank the shippers, railroads, economic development authorities, ports and other supporters that have filed letters to the STB in support of the combination. The CP-KCS combination is expected to provide an enhanced competitive alternative to existing rail service providers and is expected to result in improved service and efficiency to customers of all sizes. When combined, the CP-KCS network would remain the smallest of six U.S. Class 1 railroads by revenue.
CP is seeking approval from the STB for the combination, which also remains subject to the approvals of CP and KCS shareholders and other customary closing conditions. The STB review is expected to be completed by the middle of 2022.
