A billion-dollar operation in US rail transport took place over the weekend. The protagonists are two companies listed on Wall Street: Canadian Pacific Railway e Kansas City Southern, announced a merger worth 29 billion dollars. In detail, the monstrous sum will be paid out by CP, which will acquire the KCS shares but also its debts, which amount to approximately 3,8 billion.
The transaction, which has the unanimous support of both boards of directors, values KCS at $275 per share, which incorporates a 23% premium over the company's closing prices on March 19. According to a press release, KCS shareholders will receive 0,489 shares of CP and $90 in cash for each KCS common share held.
What will be born from the merger will be the first rail network that will connect the United States, Mexico and Canada. While remaining the smallest of America's big six by revenue, the postmerger company will operate 20 miles of railroad, employ nearly 20 people and generate total revenues of $8,7 billion annually, according to data. of 2020.
Current CP chairman and CEO Keith Creel will be the CEO of the new company, which will be called Canadian Pacific Kansas City. Calgary, Canada will be the global headquarters, while the US headquarters will be in Kansas City, Missouri.
“This transaction will be transformational for North America, providing significant positive impacts for employees, customers, communities and shareholders as we are creating the first US-Mexico-Canada railroad,” Creel said.
