CP, KCS close into voting trust

Canadian Pacific today announced the completion of its acquisition of Kansas City Southern.

Immediately upon the closing of the acquisition, the shares of KCS were placed into a voting trust with Dave Starling, former KCS president and CEO, appointed as the voting trustee.

The voting trust, which ensures KCS will operate independently of CP, will remain in effect until the U.S. Surface Transportation Board (STB) issues its decision on the companies' joint railroad control application, CP officials said in a press release.

The STB's approval of CP's control of KCS would create Canadian Pacific Kansas City Ltd. (CPKC), the only single-line railroad linking the United States, Mexico and Canada. The STB review of CP's proposed control of KCS is expected to be completed in fourth-quarter 2022, CP officials said.

"Today is a historic day for our two iconic companies," said CP President and CEO Keith Creel. "CPKC will become the backbone connecting our customers to new markets, enhancing competition in the U.S. rail network, and driving economic growth across North America while delivering significant environmental benefits. We are excited to reach this milestone on the path toward creating this unique truly North American railroad."

The transaction represents an enterprise value of $31 billion. KCS stockholders will receive 2.884 CP common shares and $90 in cash for each share of KCS common stock held and $37.50 in cash for each share of KCS preferred stock held.

"As a board and management team, we are proud of the countless contributions and achievements of all those who work for Kansas City Southern," said KCS president and CEO Patrick Ottensmeyer. "We are excited for the possibilities that will open to us through this combination with CP and we look forward to our next chapter."