Freight railroad megamerger gets U.S. regulatory approval
Canadian Pacific received U.S. regulatory approval for its $31.1 billion takeover of freight railroad operator Kansas City Southern and said the merger could close on April 14.
Why it matters: This will create the only railway that runs from Canada to Mexico and is the first railroad megamerger in decades.
The backstory: KCS originally agreed to be acquired by Canadian Pacific in March 2021, but then bailed after Canadian National Railroad made a richer offer.
- CNR, however, hit regulatory troubles with the deal, driving KCS back into Canadian Pacific's waiting arms.
- The combined company would have around 20,000 miles of rail and the same number of employees.
The bottom line: This feels like an outlier, given how eager the Biden administration has been to block other large deals. In fact, the U.S. Surface Transportation Board's approval came over the public objection of Sen. Elizabeth Warren (D-Mass.) and a DOJ letter that expressed "serious concerns" about freight rail industry consolidation.