The U.S. rail regulator is giving a green light to Canadian Pacific Railway Ltd.'s takeover of Kansas City Southern Railway Co.
The Surface Transportation Board's approval Wednesday clears the final hurdle in CP's bid to buy KCS for US$31 billion in a deal that would create the only single-line rail network linking Canada, the U.S. and Mexico.
It's been a long and bumpy route to get to this point, with CP Rail fighting a protracted battle with competitor Canadian National Railway Co. over the acquisition before CP closed its proposed deal in December 2021. In its decision Wednesday morning, the Surface Transportation Board said the merger is "end to end," meaning there are few overlapping routes. It will speed up freight travel time, enhance efficiency and allow for better competition with the other five, larger U.S. railways, it said.
The regulator attached conditions to the deal, including that the newly merged railway keep gateways -- connection points between the CPKC system and other railroads -- open on "commercially reasonable terms," and to justify in writing any rate increases over a certain level on interline movements.
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