Canadian Pacific has received permission from U.S. federal regulators to pursue its acquisition of Kansas City Southern, the railway announced Tuesday.
The Committee on Foreign Investment in the United States granted the regulatory clearance. The committee, which is affiliated with the U.S. Department of Treasury, reviews certain transactions involving foreign investment in the U.S. to determine their effect on national security.
In Tuesday’s announcement, CP said it expects the acquisition’s review by the Surface Transportation Board to be completed in early 2023.
Shareholders of CP (NYSE: CP) and KCS approved the $31 billion deal last December. CP and KCS say the merger would create a single rail system known as Canadian Pacific Kansas City (CPKC), with a network that would include approximately 21,400 total miles of track, about 6,900 miles of that in the U.S. The network would extend from Canada across the U.S. and into Mexico, and CP and KCS say the new rail system would create an “end-to-end” merger because the existing CP and KCS systems don’t overlap.
CP reaches agreement with Teamsters Canada Rail Conference
In a separate announcement on Monday, CP said it had reached a two-year labor agreement with the train and engine division of Teamsters Canada Rail Conference (TCRC).
The agreement, which runs through 2023, follows binding arbitration that was initiated last March. It includes a 3.5% wage increase in 2022 and 2023 as well as increased benefits. The TCRC will also join a CP Pension Improvement Account, CP said.
“CP welcomes the conclusion of arbitration and is pleased to have completed this agreement with the TCRC Negotiating Committee,” CP President and CEO Keith Creel said in a news release. “We continue to work with our union partners to reach agreements that meet the needs of our industry-leading railroaders and allow us to grow our business as we provide essential services for our customers and the North American supply chain.”
TCRC represents approximately 3,000 locomotive engineers, conductors, and train and yard workers across Canada, according to CP.