Canadian Pacific files objection to US regulator over Canadian National’s offer for Kansas City Railroad By Reuters

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2/2 © Reuters. FILE PHOTO: KCS Railway Company freight train displayed in Toluca 2/2

(Reuters) – Canadian Pacific Rail merger rules. Last week, the US Surface Transportation Board (STB) granted a waiver to CP’s agreed bid of $ 25 billion by Kansas City Southern, meaning the deal would no longer be subject to the rules. stringent rail merger that the regulator implemented in 2001. CP won the exemption based on its smaller size and analysts and shareholders have said that the STB decision reduces regulatory risk for the CP deal. CP and its larger rival Canadian National (CN) are in the running to take over the US Railroad Kansas City Southern (KCS), which would create the first direct railroad linking Canada, the US and Mexico. Either combination seeks to benefit from the expected recovery in trade after the agreement between the United States, Mexico and Canada was ratified last year. In its argument filed with the regulator on Friday, CP said CN’s offer to acquire KCS should be cause for concern due to its size. “A combined CN / KCS would vastly expand the size of America’s fifth-largest Class 1 railroad, vastly increasing the gap between CN / KCS and … CP,” said Canadian Pacific. CN and KCS did not immediately respond to a request for comment on CP’s submission to the regulator. CN launched an unsolicited cash and stock offering valuing KCS at around $ 29.55 billion, after CP agreed to buy KCS for around $ 25 billion in March. CP has previously said that it was not considering raising its offer. KCS previously said its board has determined that CN’s competitive bid could be expected to lead to a “superior bid.”

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