Canadian Pacific Railway Limited and Kansas City Southern will merge to create a much larger and more competitive network, operating approximately 20,000 miles of rail, employing close to 20,000 people and generating total revenues of approximately $8.7 billion based on 2020 actual revenues, according to a press release.
The merger agreement states that CP has agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately $31 billion, according to the press release.
"Our path to this historic agreement only reinforces our conviction in this once-in-a-lifetime partnership," CP President and CEO Keith Creel said in the release. "We are excited to get to work bringing these two railroads together. By combining, we will unlock the full potential of our networks and our people while providing industry-best service for our customers. This perfect end-to-end combination creates the first U.S.-Mexico-Canada rail network with new single-line offerings that will deliver dramatically expanded market reach for CP and KCS customers, provide new competitive transportation options, and support North American economic growth."
The new single-line routes made possible by the transaction are expected to shift trucks off crowded U.S. highway and lower emissions, according to the press release.
"We are glad to be partnering with CP to create a railroad that is able to compete by providing the best value for the transportation dollar," KCS President and CEO Patrick J. Ottensmeyer said in the release. "The CP-KCS combination will not only benefit customers, labor partners, and shareholders through new, single-line transportation services, attractive synergies and complementary routes, it will also benefit KCS and our employees by enabling us to become part of a growing and truly North American continental enterprise."