May 08, 2021
 
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CP Bid for US Railroad Moves  05/07 07:30

   

   OMAHA, Neb. (AP) -- Regulators on Thursday approved Canadian Pacific's plan 
for acquiring Kansas City Southern if that railroad picks CP's $25 billion bid 
over rival Canadian National's $33.7 billion offer.

   The federal Surface Transportation Board said it would accept Canadian 
Pacific's plan to set up a voting trust that would acquire Kansas City Southern 
and own the railroad while the board reviews the deal to determine whether to 
approve it. But approving the trust agreement doesn't mean regulators would 
eventually OK the deal.

   The board has said it will review any deal involving Kansas City Southern 
carefully to determine if it would enhance competition and serve the public 
interest. That review could take more than 18 months. If regulators ultimately 
reject the deal, then the voting trust would sell off Kansas City Southern, so 
it could remain independent.

   Canadian National has submitted a nearly identical plan to set up a voting 
trust if Kansas City Southern decides to accept its bid. The board has yet to 
rule on that voting trust proposal, which was submitted about a month after 
Canadian Pacific's.

   The two Canadian railroads have been in a public-relations battle, with each 
portraying its bid as superior. Meanwhile, Kansas City Southern is reviewing 
both proposals to determine which would be best.

   Canadian Pacific has said that combining Kansas City Southern and Canadian 
National would hurt competition because both those companies have rail lines 
that compete for business between the Midwest and the Gulf Coast. Canadian 
Pacific's network connects to Kansas City Southern in Kansas City, Missouri, 
but those two railroads don't overlap elsewhere.

   Canadian National has said it doesn't believe its offer would hurt 
competition, and it is confident it could address any competitive concerns 
later in the review process after its voting trust plan is approved if Kansas 
City Southern chooses its offer.

 
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