Canadian Pacific and Kansas City Southern on Sunday announced plans to join forces in a $ 29 billion deal that would create the first rail network to link the United States, Mexico and Canada.
It is an effort to capitalize on the trade flows expected to flow through the three countries after President Donald J. Trump signed the United States-Mexico-Canada agreement last year. It is also a bet on the strength of the industrial economy as the United States recovers from the pandemic.
The Canadian Pacific Railway connects the major ports on the east and west coasts between the United States and Canada, while Kansas City Southern connects the United States, Mexico and Panama. The two connect at a single point: a joint facility in Kansas City, Missouri, where Kansas City Southern is based.
This deal has so many long-term strategic benefits, Kansas City Southerns general manager Patrick J. Ottensmeyer said in an interview. Our board really saw the value of bringing these two companies together right now.
The amalgamated company, Canadian Pacific Kansas City, will have its global headquarters in Calgary, Alberta, while Kansas City will serve as the US headquarters. It will operate approximately 20,000 miles of track and generate sales of approximately $ 8.7 billion. Canadian Pacific Chief Executive Officer Keith Creel will oversee the new entity.
The deal values Kansas City Southern at $ 275 per share, which is a 23% premium over its closing price on Friday. Investors will receive 0.489 Canadian Pacific shares and $ 90 in cash for each Kansas City common share.
This is also a significant increase over $ 208 an offer of shares of the Blackstone group, a private equity firm, which Kansas City Southern fired last year. Kansas City shares are up 12% year-to-date, while Canadian Pacific shares are up nearly 10%.
The boards of both companies unanimously approved the cash and stock deal, which is expected to close by mid-2022, subject to customary approvals.
The railway industry can be considered as an indicator of industrial activity; he hopes to take advantage of a growing US economy after the pandemic is over. The Federal Reserve has expressed optimism for the country’s economic outlook and President Biden signed a $ 1.9 trillion spending bill this month.
Investors from Canadian Pacific and Kansas City Southern aren’t the only ones who are optimistic about the outlook for the industry. Warren Buffett, whose Berkshire Hathaway owns BNSF Railway, recently touted the value he sees in the US rail industry in his annual letter.
Railroad executives on Sunday highlighted other opportunities they see in the deal. Mr. Creel called the merger a compelling opportunity to get trucks off the road at a time when the United States is focused on a transition to a greener economy. It also reduces risks in the global supply chain after a pandemic that exposed its weaknesses, Mr Ottensmeyer said.
The agreement must be approved by the Surface Transportation Board, a division of the Department of Transportation, which has already recognized fears that the consolidation of railways service issues for shippers. Canadian Pacific’s past efforts to acquire American railroads have failed, in part because of these concerns. Including interviews with CSX Corporation in 2014 and Norfolk Southern in 2016. And the Biden administration has already signaled a stronger stance on antitrust control.
Due to its size, Kansas City Southern is exempt from directives put in place in 2001 to tighten the control of transactions in the sector. The merged company would still be the smallest of the six largest freight railroads still in operation in the United States. The two railroads do not overlap, Mr Creel and Mr Ottensmeyer said, and in some cases the transaction will create new markets.
There is no other agreement that represents the uniqueness of this agreement, Mr. Creel said.
What Are The Main Benefits Of Comparing Car Insurance Quotes Online
LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos
to request, modification Contact us at Here or [email protected]