CP shareholders say yes to buying KCS

(Calgary) Shareholders in Canadian Pacific Railway (CP) have agreed to take over the Kansas City Southern Railroad.

CB said its shareholders voted 99.9 percent to issue up to 278 million common shares to KCS shareholders, a major milestone in the deal.

Shareholders in the Calgary-based company also agreed to a name change, which will become the Canadian carrier Pacific Kansas City. However, this new name must be approved by the regulatory agencies in the United States.

CP agreed in September to acquire KCS in a $31 billion deal, including taking on $3.8 billion in debt, after a bitter battle with the rail company. National Railways of Canada (CN), which was also seeking to get its hands on a rail operator in the United States.

The US regulator has agreed to use a voting fund for the transaction, which will allow KCS shareholders to receive payments once stockholders of both companies approve the transaction, but before the Surface Transfer Board gives final approval to the transaction.

KCS shareholders are due to vote on the deal Friday at a private meeting, and CP says it expects to reach the deal on December 14.

Mexican regulatory authorities gave the green light to the deal last month.

Today’s shareholder approvals are an essential step on our path towards this unique partnership […] to create the first rail network between the United States, Mexico and Canada,” CP CEO Keith Creel said in a statement.

“The massive support our shareholders gave to the deal today is essential to making this merger a reality.”

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