Bennett Jones Acting for CP Railway in US$29-billion Combination with Kansas City Southern

Bennett Jones is acting as Canadian counsel for Canadian Pacific Railway (CP) in its combination with Kansas City Southern (KCS) to create the first rail network connecting the United States, Mexico, and Canada. Under the merger agreement, CP has agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately US$29 billion. The transformative transaction has the unanimous support of both boards of directors.

The combined network’s new single-line offerings will deliver dramatically expanded market reach for customers served by CP and KCS, provide new competitive transportation service options, and support North American economic growth.

Following final regulatory approval, a single integrated rail system will connect premier ports on the U.S. Gulf, Atlantic and Pacific coasts with key overseas markets. The new single-line routes made possible by the transaction are expected to shift trucks off crowded U.S. highways, yielding reduced highway traffic and lower emissions.

There is a two-step process to complete the transaction and merger, and CP’s ultimate acquisition of control of KCS’ U.S. railways is subject to the approval of the U.S. Surface Transportation Board. The combined entity will be named Canadian Pacific Kansas City (CPKC) and its global headquarters will be in Calgary.

The Bennett Jones team on the deal was led by Jeff Kerbel (Corporate/Securities) and included Harinder Basra, Brent Kraus, Eric Chernin and Annie Tonken (Corporate/Securities), Scott Bodie, Anu Nijhawan and Jared Mackey (Tax), Karen Dawson and Mark Powell (Finance), Carl Cunningham (Employment) and Melanie Aitken, Robert Staley and Adam Kalbfleisch (Competition/Antitrust).

CP’s news release on the transaction is available here.