THE Mexican Federal Economic Competition Commission (Cofece) and the Mexican Federal Telecommunications Institute (IFT) have both approved the planned merger between Class 1s Canadian Pacific (CP) and Kansas City Southern (KCS).
“This important milestone marks the next step on our path to creating the first single-line rail network linking the US, Mexico and Canada,” says Mr Keith Creel, CP president and chief executive officer.
CP will acquire KCS for approximately $US 31bn including the assumption of $US 3.8bn of outstanding KCS debt. The deal has unanimous support of both boards of directors and values KCS at $US 300 per share, representing a 34% premium.
The transaction remains subject to satisfaction of customary closing conditions, including approval from stockholders of both companies. There is a scheduled vote for CP stockholders on December 8 and for KCS on December 10. Provided the transaction is approved at these meetings then the deal is expected to close on December 14.
The United States Surface Transportation Board’s (STB) review of the merger is expected to be completed in the fourth quarter of 2022.