27 July 2007
Storied CP Rail's Doors Open for New Owner
Created more than a century ago with the mission of helping build
a nation by uniting its people from coast to coast, Canadian Pacific Railway has become the latest buyout candidate and could soon join
a growing list of Canadian business icons taken over by foreign companies or private investors.
An imminent takeover of the operator of Canada's second-largest railway isn't in the cards, as the Calgary company
confirmed it had rejected takeover discussions with Toronto-based Brookfield Asset Management Inc., a company formerly
known as Brascan.
But CP Rail indicated the doors remained open for future discussions, which means it could be only a matter of time before the
120-year-old freight hauler gets a new owner. If it's not Brookfield, it could be other private investors, or one of many
U.S. rail companies looking to integrate their operations in a continental network.
If CP Rail is acquired by a foreign buyer, it would join Inco, Dofasco, Falconbridge, Alcan, and Hudson's Bay Co. to be swallowed up by
U.S. or overseas companies.
While many of these companies have been business icons for decades, few have the storied history of CP Rail, founded in 1881 to link
Canada's populated centres in the East with the relatively unpopulated West.
The idea first surfaced in July 1867, when Canada's Confederation brought four eastern provinces together to form a new country.
As part of the deal, Nova Scotia and New Brunswick were promised a railway to link them with the two central Canadian provinces -
Quebec and Ontario.
It was the promise that a transcontinental railway would be built within 10 years that brought British Columbia into Confederation four
years later.
On 21 Oct 1880 a group of Scottish-Canadian businessmen finally formed a viable syndicate to build a
transcontinental railway. The Canadian Pacific Railway Co. was created on 16 Feb 1881.
The engineering feat was completed on 7 Nov 1885 - six years ahead of schedule - when the last spike was driven at
Craigellachie, B.C.
The Canadian Pacific Railway grew into Canada's first conglomerate, to include hotels, real estate, shipping, and oil and gas
businesses.
CP Rail built some of its own steam locomotives as early as 1883. It would later build its own rail passenger cars, making it second
only on the continent to the Pullman Co. of Chicago.
The Canadian Pacific conglomerate was split up in late 2001 and CP Rail became an independent company widely owned by retail and
institutional investors.
The rail operator was the last of Canadian Pacific's main operating companies that were spun off - which included PanCanadian, Fording
Coal, CP Ships, and CP Hotels - to remain independent.
CP Rail now operates in Canada and the U.S. with a 22,500-km rail network that serves the principal centres of Canada,
from Montreal to Vancouver and the U.S. northeast and midwest regions.
Alliances with other carriers extend its market reach throughout the U.S. and into Mexico.
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