The deal is an effort by Canadian Pacific and Kansas City Southern to capitalize on an expected increase in the flow of trade as the three countries rebound from the pandemic.
Canadian Pacific and Kansas City Southern announced plans on Sunday to combine in a $29 billion deal that would create the first railroad network connecting the United States, Mexico and Canada. It is an effort to capitalize on the trade flows expected to run through the three countries after President Donald J. Trump signed the United States-Mexico-Canada Agreement into law last year. It’s also a bet on the strength of the industrial economy as the United States rebounds from the pandemic. Canadian Pacific links 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 on a single point: a joint facility in Kansas City, Mo., where Kansas City Southern is based. “This deal just has so many longer-term strategic advantages,” Kansas City Southern’s chief executive, Patrick J. Ottensmeyer, said in an interview. “Our board really saw the value in putting these two companies together right now.” The combined company, Canadian Pacific Kansas City, will have its global headquarters in Calgary, Alberta, while Kansas City will serve as its U.S. headquarters.
