Calgary Alberta - Canadian Pacific Railway Limited (CP) today announced that the Surface Transportation Board (STB) confirmed that the waiver it granted to Kansas City Southern (KCS) in 2001 is applicable to the proposed friendly combination of the two companies.
 
CP and KCS will proceed with an Application under the standards set forth in the STB's pre-2001 major merger rules.
 
In its filing dated 23 Apr 2021 the STB stated, "The Board makes this finding for several reasons. If approved, the combination of CP and KCS, the sixth largest and seventh largest Class I railroads, respectively, would still result in the smallest Class I railroad, based on U.S. operating revenues. In addition, a merger of the CP and KCS networks would appear to result in the fewest overlapping routes when compared to a merger between KCS and any other Class I carrier. The interrelationship between the CP and KCS networks in fact appears to be end-to-end in nature, which likely raises fewer competitive concerns than a transaction that is not end-to-end. In sum, the Transaction appears to fall neatly into the Board's rationale for adopting the waiver in the first instance."
 
On 21 Mar 2021 CP and KCS entered into a merger agreement under which CP has agreed to acquire KCS.
 
The STB's decision is an important step in the transaction and reinforces the pro-competitive nature of this specific combination that would create the first U.S.-Mexico-Canada rail network.
 
Over 415 customers, ports, trans-loads, and other stakeholders have filed letters with the STB supporting the combination, which is expected to create new competitive transportation service options and support North American economic growth.
 
CP is seeking approval from the STB for the combination, which also remains subject to the approvals of CP and KCS shareholders and other customary closing conditions.
 
The STB review is expected to be completed by the middle of 2022.
 
CP and KCS welcome an efficient, thorough, and fair STB approval process.
 
Author unknown.