March 21, 2021 | Industrials | North America | Active

Kansas City Southern / Canadian Pacific Railway: New Deal Insights


On 21-Mar-21, Canadian Pacific Railway agreed to acquire its smaller rival, Kansas City Southern in a cash and stock takeover worth $29bn, which would make this Canadian Pacific’s biggest acquisition to date. The offer valued Kansas City Southern at $275 per share based on closing prices on 19-Mar-21, a one-day premium of 23%. Kansas City Southern's perpetual preferred holders (KSU 4 PERP Pfd) will receive $37.50 in cash for each preferred share. Canadian Pacific’s President and CEO, Keith Creel, will lead the merged company, to be renamed Canadian Pacific Kansas City (CPKC), and the company will be headquartered in Calgary with regional headquarters in Kansas City, Mexico City, and Monterey ... Deal risks assessed in this report: Activism against waiver for KSU; complainants cause the Department of Justice (DoJ) and Surface Transportation Board (STB) to question the appropriateness of the voting trust.



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