The U.S. rail regulator is giving a green light to Canadian Pacific Railway Ltd. to take control of Kansas City Southern Railway Co. as early as April 14.
The Surface Transportation Board's approval Wednesday clears the final hurdle in CP's bid to buy KCS for $31 billion US in a deal that would create the only single-line rail network linking Canada, the U.S. and Mexico.
The merged railway will be named Canadian Pacific Kansas City, with current CP chief executive Keith Creel as CEO and Calgary as the global headquarters.
STB chair Martin Oberman said the regulator has concluded the merger is consistent with the public interest. He pointed out that while consolidation in the rail industry has been a concern over the last few decades, CP and KCS are actually the two smallest of North America's Class I railways — making the risk that the deal will reduce competition less of a concern.
He added the merger is also "end to end," meaning there are few overlapping routes between the two railways. He said the deal is expected to speed up freight travel time, enhance efficiency and allow for better competition with the other five, larger U.S. railways.
The regulator was also influenced by the argument that the merger will ultimately foster the growth of rail traffic, potentially shifting up to 64,000 truckloads annually off of highways onto trains and helping to reduce greenhouse gas emissions.
This is an excerpt from the 15 March 2023 CBC News Article, CP Rail's takeover of Kansas City Southern gains final regulatory approval