Canadian Pacific (CP) and Kansas City Southern (KCS) have received the required Mexican regulatory pre-transaction control approvals for their proposed combination, Canadian Pacific Kansas City.
CP and KCS reported the approvals by the Mexican Federal Economic Competition Commission (COFECE) and Mexican Federal Telecommunications Institute (IFT) on Nov. 26—a move that Cowen and Company Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl anticipated in his Nov. 23 column on KCS.
The proposed CP-KCS merger remains subject to customary closing conditions, including approval from both companies’ stockholders. CP and KCS are set to hold virtual meetings for stockholder votes on Dec. 8 at 11 a.m. ET and Dec. 10 at 10 a.m. ET, respectively. “Provided the transaction is approved by CP and KCS stockholders, it is expected to close two business days later on Dec. 14,” CP and KCS said.
The Surface Transportation Board (STB) on Nov. 23 accepted for consideration the CP-KCS merger application, which was submitted on Oct. 29. It reported that the application is “complete as it contains all information required by the Board’s regulations.” STB also adopted a procedural schedule that sets deadlines for comments, responsive applications, final briefs and other filings—all of which come before it makes a final decision.
The STB review is expected to be completed in fourth-quarter 2022, according to CP and KCS.
“This important milestone marks the next step on our path to creating the first single-line rail network linking the U.S., Mexico and Canada,” CP President and CEO Keith Creel said. “This historic combination will add capacity to the U.S. rail network; create new competitive transportation options; support North American economic growth; and deliver important benefits to customers, employees and the environment.”
“We are very excited to be working with CP to bring the benefits of this end-to-end combination to fruition,” KCS President and CEO Patrick J. Ottensmeyer said. “Together we will unlock the full potential of our networks to provide new single-line offerings and industry-best service that will dramatically expand competitive transportation options across North America.”