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Voting Trust For Canadian Pacific-KC Southern Merger Reaffirmed

The Surface Transportation Board recently reaffirmed Canadian Pacific Railway’s use of a voting trust to hold shares of Kansas City Southern while their proposed $31 billion merger is formally reviewed by regulators.  The reauthorization is a critical step toward bringing the continent’s two smallest Class One Railroads together, forming a single entity connecting Canada, the U.S., and Mexico.  Shaun Haney, editor of the Canadian ag publication Real Agriculture, says that farmers will be a key client for the combined railway.

A voting trust had already been approved in May as part of the first proposed merger, weeks before KCS accepted a larger offer from Canadian National.  That deal fell apart when regulators rejected the Montréal railway’s request for a voting trust.  Haney notes that Canadians were relieved that it was their companies vying for American assets and not the other way around.

If approved by regulators, the merged railroad will be called Canadian Pacific Kansas City and maintain its world headquarters in Calgary, with its U.S. operations based in Kansas City.