Canadian Pacific Railway clinched a deal to take over Kansas City Southern, as a rival dropped its pursuit of the highly coveted railroad after a months long battle, reported Reuters.
The US$27 billion agreement, if completed, would be the first major merger in the industry in the US in about two decades and would create the first freight rail network linking Canada, the US, and Mexico.
Canadian Pacific and Kansas City Southern had reached a US$25 billion deal in March before the rival, Canadian National Railway, submitted a roughly US$30 billion topping bid. That prompted Kansas City Southern to switch partners, before a regulatory panel that must bless railroad mergers denied Canadian National’s plans to use a temporary voting trust, a key element of its proposal.
Related: CN To Sell Assets To Ease Kansas City Southern Antitrust Concerns
In the wake of that decision, Kansas City Southern on Sunday, September 12, stated it favored a sweetened cash-and-stock offer from Canadian Pacific, which had already received the go-ahead for a similar trust. Canadian National then had five business days to improve its offer or walk away.
In a statement on its decision not to continue pursuing the deal, Canadian National stated the US regulatory landscape has become more challenging for major railroad mergers since its bid was launched. It referred to an executive order from President Biden in July that focused on maintaining and increasing competition in key sectors, including the largest railroads, and suggested the shift could pose an issue for Canadian Pacific.
The decision to back away could appease one of Canadian National’s major shareholders, TCI Fund Management, the London hedge fund that owns a 5% stake in the railroad. On Monday, it threatened a proxy fight to replace board members and Canadian National’s chief executive.
Featured News
Google and South Carolina Clash Over State Records Demand
May 8, 2024 by
CPI
Telefonica Germany Teams Up with Amazon Web Services to Migrate 5G Customers
May 8, 2024 by
CPI
Federal Judge Grants $7.4 Million Settlement in Pork Price-Fixing Case
May 8, 2024 by
CPI
Wilson Sonsini Bolsters Antitrust and Competition Practice with Key Partner Returns
May 8, 2024 by
CPI
EU to Scrutinize Telecom Italia’s Network Sale to KKR
May 8, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI