Canadian Pacific Railway has agreed to acquire Kansas City Southern in a $25 billion deal that will create the first rail network connecting the United States, Mexico and Canada, the two companies announced Sunday.
KEY FACTS
The transaction, which is expected to close by the middle of next year, values Kansas City Southern at $275 per share, nearly 23% more than the stock’s closing price Friday.
Kansas City Southern shareholders, who will own about 25% of the combined firm, will receive nearly 0.5 shares of Canadian Pacific and $90 in cash for each share of Kansas City Southern held.
Calgary, Alberta-based Canadian Pacific will also assume Kansas City Southern’s approximately $3.8 billion in debt outstanding, giving the transaction an enterprise value of nearly $29 billion.
Canadian Pacific will issue 44.5 million new shares and raise approximately $8.6 billion in new debt to fund the transaction, bringing its total outstanding debt to roughly $20.2 billion once the deal closes.
Operating under the name Canadian Pacific Kansas City, the combined company will be the smallest of the six U.S. Class 1 railroads by revenue, with approximately $9 billion in annual sales, about 20,000 miles of rail and 20,000 employees.
Jonathan Ponciano. (2021). Canadian Pacific To Buy Kansas City Southern In $25 Billion Deal Creating First Rail Network Spanning U.S., Mexico And Canada. USA. Forbes. Recuperado de
