Railroad megamerger would create the first Mexico-US-Canada freight rail network | WHAT REALLY HAPPENED X-Frame-Options: SAMEORIGIN

Railroad megamerger would create the first Mexico-US-Canada freight rail network

Two of North America's largest railroad companies announced a merger Sunday that would connect freight customers to Canada, the United States and Mexico on a single network for the first time in history.

Canadian Pacific (CP) agreed to purchase Kansas City Southern (KSU) in a deal worth about $25 billion after discounting $3.8 billion of KCS debt that Canadian Pacific will take on. It would combine two of the industry's fastest-growing rail companies at a time when online purchases have soared, overwhelming ports and delaying shipments.

The companies said in a statement that the deal would help them become more competitive. That could become increasingly important as the USMCA -- the revised NAFTA trade deal between the United States, Canada and Mexico -- takes hold. The combined company would operate 20,000 miles of rail, employing nearly 20,000 people and generating annual sales of about $8.7 billion.

"The new competition we will inject into the North American transportation market cannot happen soon enough, as the new USMCA Trade Agreement among these three countries makes the efficient integration of the continent's supply chains more important than ever before," said Canadian Pacific CEO Keith Creel, in a statement.

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