Kansas City Southern to Enter Merger Talks With Canadian Pacific

The announcement comes days after federal regulators nearly torpedoed Canadian National’s plan to merge with Kansas City Southern. Photo by Justin Franz.

Kansas City Southern to Enter Merger Talks With Canadian Pacific

By Justin Franz 

KANSAS CITY — Kansas City Southern announced Saturday that it will again enter negotiations with Canadian Pacific about a potential merger. 

The news comes just days after the U.S. Surface Transportation Board ruled against a plan by its previous merger partner, Canadian National, to put KCS into an independent trust during the federal review. Many believed that decision will derail the CN-KCS combination. The fallout of that decision has been swift and hours after, CN shareholders called for CEO JJ Ruest to resign

KCS officials said that there was “no assurance that the discussions with CP will result in a transaction.”

Earlier this year, CP and KCS shocked the railroad world when they announced intentions to merge. But those plans were derailed when CN made a higher bid a few weeks later. CP refused to up its offer and KCS went with the competitor. However, CP has not given up and in August, the railroad decided to make a new offer valuing KCS at $300 per share. KCS initially dismissed the new offer.

After the STB’s bombshell decision, CP CEO Keith Creel said the $300 per share offer — worth about $27 billion — was still good but that KCS had to decide before September 12. 

This article was posted on: September 4, 2021