(Calgary) Shareholders of Canadian Pacific Railway (CP) have agreed to the takeover of US rail carrier Kansas City Southern.
CP said its shareholders voted 99.9% to issue up to 278 million common shares to KCS shareholders, a key milestone in the deal.
Shareholders in the Calgary-based company also approved the name change, which will see the carrier become Canadian Pacific Kansas City. This new name, however, must be approved by regulatory bodies in the United States.
CP agreed in September to acquire KCS in a deal valued at US $ 31 billion, including the assumption of US $ 3.8 billion in debt, following a bitter battle with the Railway Company. National Railways of Canada (CN), which was also seeking to get its hands on the US rail operator.
The U.S. regulator has approved the use of a voting trust for the transaction, which will allow KCS shareholders to receive payment once securityholders of both companies approve the deal, but before the Surface Transportation Board gives final approval to the transaction.
KCS shareholders are due to vote on the transaction on Friday at a special meeting, and CP says it expects the deal to be reached on December 14.
Mexican regulatory authorities gave the green light to the deal last month.
“Shareholder approvals today are a key step on our path to this unique partnership […] to create the first US-Mexico-Canada rail network, ”CP CEO Keith Creel said in a statement.
“The massive support that our shareholders have given to the transaction today is essential to make this merger a reality. ”