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CP, KCS await federal approval of now-complete merger

KCS shares placed in voting trust

A Canadian Pacific train and a Kansas City Southern train. (Photo: Flickr/Kurt Haubrich CC BY-ND 2.0 & CP)

Canadian Pacific has formally completed its acquisition of Kansas City Southern, and both are now waiting for the Surface Transportation Board to approve their merger.

The merger’s value is worth approximately US$31 billion. KCS stockholders will receive 2.884 CP common shares and US$90 in cash for each share of KCS common stock held and US$37.50 in cash for each share of KCS preferred stock held.

With the acquisition complete, the shares of KCS are being placed in a voting trust. CP (NYSE: CP) says the trust, which is being used as part of the process to acquire KCS (NYSE: KSU), ensures that KCS will operate independently of CP until the Surface Transportation Board approves CP’s merger application. 

Former KCS President and CEO Dave Starling is the trustee for the voting trust.


Shareholders from both CP and KCS recently approved the merger. 

“Today is a historic day for our two iconic companies,” said CP President and CEO Keith Creel in a Tuesday statement. The new company will be named Canadian Pacific Kansas City (CPKC). “CPKC will become the backbone connecting our customers to new markets, enhancing competition in the U.S. rail network, and driving economic growth across North America while delivering significant environmental benefits. We are excited to reach this milestone on the path toward creating this unique truly North American railroad.”

Said KCS President and CEO Pat Ottensmeyer: “As a Board and management team, we are proud of the countless contributions and achievements of all those who work for Kansas City Southern. We are excited for the possibilities that will open to us through this combination with CP and we look forward to our next chapter.”

The STB could potentially hold a public hearing on the merger sometime in 2022, following filings from CP, KCS and interested parties on the pros and cons of the merger. 


Preliminary comments from Union Pacific (NYSE: UNP) and others suggest there will be calls for federal regulators to scrutinize the proposed merger. UP and BNSF (NYSE: BRK.B) would be direct competitors of CPKC.

CP expects STB to complete its review of the merger application in the fourth quarter of 2022.

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.