Canadian Pacific Railway (CP) has agreed to purchase the Kansas City Southern railroad for US$29bn, creating the first US-Canada-Mexico rail network, World Grain reported on 25 March.
The new rail network would lead to improved efficiency and supply chain integration for grain companies and others, the report said.
Following the transaction, the combined rail company would be named Canadian Pacific Kansas City (CPKS) and would expand to 32,186km (20,000 miles).
“This deal links the origination in production-rich origins that CP has to new export and domestic consumption markets that we simply just can’t get to today,” said CP executive vice president and chief marketing officer John Kenneth Brooks was quoted as saying in a conference call with investors on 22 March.
“It gives our corn, soyabean, wheat, canola and products of meals, oils and ethanol … additional domestic markets. Producers and shippers gain routes to the Gulf of Mexico and, of course, into Mexico itself.”
CPKS global headquarters are likely to be in Calgary, with Mexico City and Monterrey continuing as Mexico headquarters, according to World Grain.
Meanwhile, CP was planning to move its US headquarters to Kansas City from Minnesota, with the latter remaining an operational base, the report said.