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Fox Business
Fox Business
15 Mar 2023


In the first major U.S. railroad merger in more than two decades, federal regulators approved Canadian Pacific’s $31 billion acquisition of Kansas City Southern. 

The Wednesday move comes after a two-year-long review by the U.S. Surface Transportation Board because the merger of the two railroads will create the only railroad linking Canada, Mexico and the United States.

The board said that the new service will "facilitate the flow of grain from the Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago and the trade in automotive parts, finished vehicles and other containerized mixed goods between the United States and Mexico."

It also said that the combined company will have little-to-no track redundancies or overlapping routes and would add more than 800 new union jobs. Canadian Pacific said it had already reached agreements with some of the biggest rail unions.

Canadian Pacific trains in a train yard

Canadian Pacific trains sit at the main CP Rail train yard in Toronto, March 21, 2022. ((Nathan Denette/The Canadian Press via AP) / AP Newsroom)

The board said the service would shift approximately 64,000 truckloads annually from North America’s roads to rail and would support investment in infrastructure, service quality and safety. 

Kansas City Southern (KSC) Railway signage on a train

Kansas City Southern (KSC) Railway signage is displayed on a freight car parked at a rail yard in Kansas City, Missouri, on Jan. 7, 2020.  (Photographer: Whitney Curtis/Bloomberg via Getty Images / Getty Images)

The railroad industry has been under increased public scrutiny since last month's toxic Norfolk Southern train derailment in Ohio. The state is now suing the rail operator.

Canadian Pacific trains

Canadian Pacific trains sit idle on the tracks due to a strike at the main CP Rail train yard in Toronto, on March 21, 2022.  ((Nathan Denette/The Canadian Press via AP) / AP Newsroom)

Canadian Pacific outmaneuvered Canadian National railroad in 2021 to complete the deal. Even after the merger, the new Canadian Pacific Kansas City railroad will be the smallest of the major freight railroads, with about 20,000 miles of track.

Shares of Canadian Pacific Railway Ltd. jumped 7% on Wednesday.

The Associated Press contributed to this report.