CP - KCS Deal Looking Certain

Sep 14, 2021

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It almost seems certain now, that Calgary based CP rail will move forward in acquiring Kansas City Southern.

On the weekend, the board at KC said the bid of about 31 billion dollars by CP, which includes debt was superior to the offer being made by rival CN. Initially, the company had accepted CP's bid, months ago, but then entertained a sweeter off by CN. But it was dealt a major setback recently when the US surface transportation board rejected CN's use of a voting trust to complete the deal.

CP said on the weekend, its merger with KCS would maintain all existing freight rail gateways while creating new north-south lanes between western Canada, the US, upper Midwest, the gulf coast and Mexico. CP also said the deal would create a route network that doesn't funnel all of its traffic through the already congested Chicago area.

Meanwhile, some of the top shareholders for CN are demanding changes to the current board of directors and the firing of the company's CEO.

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