Status: 03/22/2021 3:56 p.m.
It is one of the largest mergers in railroad history: With a $ 25 billion merger, the Canadian Pacific and Kansas City Southern railways want to benefit from the North American trade agreement.
In North America, a mega-merger is imminent in rail transport. The two rail companies Canadian Pacific Railway and Kansas City Southern want to merge to form a joint freight transport provider. Canadian Pacific, which is listed on the Toronto Stock Exchange, announced a $ 25 billion takeover bid for Kansas City Southern, based in the US state of Missouri.
The billion dollar merger would be one of the largest in railway history. The Canadian Pacific has so far only handled freight traffic in Canada and the USA. The merger would create the first rail network stretching from Canada via the United States to Mexico.
Trade agreement facilitates cooperation
The joint company, based in Calgary, Canada, wants to benefit from the increasing freight traffic between the three countries. Canada, Mexico and the USA signed a new trade agreement last year.
In a joint communication, the two companies emphasize not only the economic but also the environmental benefits: Freight traffic can thus be increasingly moved from road to rail. In this way, the load of more than 300 trucks could be transported in a single train, saving three quarters of greenhouse gas emissions.
The takeover offer is to be settled through a cash payment and a share swap. Regulators have yet to approve the merger.
With information from Peter Mücke, ARD-Studio New York.
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Mega merger freight railways rail network Canada Mexico