Railroad Merger to Create 1st-ever Canada-Mexico-U.S. Network

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March 21, 2021

In a bid to stimulate trade throughout North America, the Canadian Pacific and Kansas City Southern railroads announced a $29 billion merger deal that, if approved, would result in the first rail network to link Canada, Mexico, and the U.S.

Canadian Pacific Kansas City railway map

The nexus of the new 20,000-mile network would be Kansas City, Mo., through which both existing railroads run. Canadian Pacific covers the East and West Coast of Canada and the U.S.; Kansas City Southern runs through Mexico and Panama. The new company is to be called Canadian Pacific Kansas City and have three headquarters: a global one in Calgary, Alberta; a U.S. one in Kansas City; and a shared Mexico one in Mexico City and Monterrey. Canadian Pacific Chief Executive Keith Creel is slated to be the new company's CEO; in essence, the merger is a buyout of Kansas City Southern by Canadian Pacific, with the latter paying $25 billion.

Boards of both existing companies have approved the merger, in unanimous fashion. Finalization, including the requisite approvals from outside entities, is expected in mid-2022. Among the approvals needed is from the Surface Transportation Board, a subsidiary of the U.S. Department of Transportation. Officials for both companies pointed to the fact that the existing networks do not overlap except in Kansas City as reason for being confident that the merger would go ahead.

The two existing railroads are, at the moment, the sixth- and seventh-largest Class I railroads in North America. The largest, in order of 2010 revenue, are these:

  1. Union Pacific
  2. BNSF
  3. Canadian National
  4. CSX
  5. Norfolk Southern
  6. Canadian Pacific
  7. Kansas City Southern.

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