US Regulator Awards CP Railway Early Win As Kansas City Southern Review Continues By Reuters

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2/2 © Reuters. Canadian Pacific Rail Station Shown at Port Coquitlam 2/2

(Corrects that STB’s decision is to keep the exemption, not to approve the merger) (Reuters) -Canadian Pacific Railway Ltd on Saturday welcomed the US Surface Transportation Board’s (STB) decision to keep a 2001 waiver granted to Kansas City Southern (NYSE 🙂 applicable to the merger of the two companies. The two companies will proceed with an application in accordance with STB’s pre-2001 major merger standards, according to a Canadian Pacific (NYSE 🙂 statement. The STB, charged with the economic regulation of several surface transportation modes, mainly freight rail, confirmed on Friday that the exemption it granted to Kansas City Southern in 2001 is applicable to the proposed friendly combination of the two companies. Both companies expect the STB review to be completed by mid-2022. The STB updated its merger regulations in 2001 to introduce a requirement that Class I railroads in the United States must demonstrate that an agreement is in the public interest. According to the regulator, the merger would result in the smallest Class I railroad, based on US operating income, and would also result in few overlapping routes. CP had agreed to buy Kansas City Southern in a $ 25 billion cash and stock deal to create the first railroad to span the United States, Mexico and Canada in March. Canadian National Railway Co made a competitive bid of $ 33.7 billion for Kansas City Southern on Tuesday, after which CP said it will not increase its offer. Its chief executive, Keith Creel, said the offer from its biggest rival, Canadian National, “is not a real deal.”

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