The Mexican Federal Economic Competition Commission and the Mexican Federal Telecommunications Institute have given regulatory approval of the proposed merger between Canadian Pacific and Kansas City Southern, both companies announced Friday.
CP (NYSE: CP) and KCS (NYSE: KSU) needed approval from Mexican regulators because KCS has operations in Mexico.
“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,” said CP President and CEO Keith Creel in a statement.
KCS President and CEO Pat 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.”
Industry observers will now be turning their eyes onto U.S. regulators, with the Surface Transportation Board just giving its approval of CP’s and KCS’ merger application. The board will accept testimonies from stakeholders through the first half of 2022, with a possible public hearing and final briefs occurring sometime after July 1. The board would issue its final decision 90 days after the evidentiary record closes.
CP still anticipates STB’s review to be completed sometime in the fourth quarter of 2022.
Also coming up are the shareholder meetings of both companies, in which stockholders will vote on the proposed merger. CP will hold its meeting on Dec. 8 and KCS will hold its meeting on Dec. 10. Those two transactions would close on Dec. 14.
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