[ad_1]
Canadian Pacific has agreed to buy Kansas City Southern for $ 25 billion, which would be the biggest deal of the year, according to people with knowledge of the matter.
The Calgary Railroad has offered to buy the US freight group for $ 275 per share in a cash and equity offer.
CP’s proposal represents a 23 percent premium on the Kansas City Southern stock’s closing price on Friday.
The Kansas City Southern board of directors has approved the offer. The two companies informally informed the Surface Transportation Board, the U.S. regulator, of the deal on Saturday evening, people briefed on the matter said. The acquisition must be approved by the STB.
The transaction is expected to be announced on Sunday, those familiar with the matter said.
The deal comes as trade between the United States and Mexico is set to resume after Joe Biden’s victory in the 2020 US presidential election over Donald Trump.
Kansas City Southern’s network stretches from the US Midwest to ports on the east and west coasts of Mexico.
The CP declined to comment.
Kansas City Southern did not respond to a request for comment.
The US company launched a takeover bid last year from Global Infrastructure Partners and Blackstone Group that valued the US rail group at $ 21 billion.
Kansas City Southern shares have more than doubled in the past 12 months.
The rail industry was hit hard at the start of the pandemic due to restrictions imposed by the US government to contain the spread of the coronavirus.
But in recent months, the outlook for the industry has improved markedly as the United States ramped up its vaccine rollout and business activity accelerated significantly.
Biden’s steps to strengthen the U.S.-Mexico trade relationship are expected to further boost rail activity.
This article has been edited to reflect the fact that the Surface Transportation Board has not approved the agreement
[ad_2]
Source link