top of page

Canadian Pacific Railway To Acquire Kansas City Southern In $29B Deal


Canadian Pacific Railway has announced a deal to acquire Kansas City Southern valuing the latter at an enterprise value of $29 billion and an equity value of about $25 billion. The deal will create the first railroad that runs through Mexico, the United States, and Canada.


Following the completion of the transaction, the combined company will operate 20,000 miles of rail, employ nearly 20,000 people, and generate annual revenue of $8.7 billion. However, it will remain the smallest of the six Class 1 railroads in North America by revenue, which could help it clear regulatory hurdles.


The transaction will increase single-line haul options for customers by allowing them to send their goods across the continent with a single railroad. Conveniently, Canadian Pacific and Kansas City Southern already connect at a station in Missouri, so combining the two lines will not be costly.


The deal will be completed using a mix of cash and stock. Each shareholder will receive $90 in cash and 0.489 of a CP share in exchange for each KCS share held. That represents a 23% premium to Kansas City Southern's closing price prior the deal’s announcement.


Komentar


bottom of page