(Calgary) Kansas City Southern shareholders on Friday gave the green light for the acquisition of the US rail carrier by Canadian Pacific Railway.
Shareholders voted for the transaction in a proportion of 96.6%, during an extraordinary meeting which lasted less than 10 minutes. Their support paves the way for the creation of the only rail network linking Canada, the United States and Mexico.
The approval follows that of Mexican regulators last month and that of CP shareholders on Wednesday.
Canadian Pacific Railway agreed in September to acquire KCS as part of a deal valued at US $ 31 billion, including the assumption of US $ 3.8 billion in debt, following a fierce battle with the Company. Canadian National Railways (CN), which was also looking to get its hands on the US rail operator.
“With the support of shareholders, we are excited to take the necessary steps to put in trust in the transaction involving CP and KCS. This is a critical step in making Canadian Pacific Kansas City a reality, ”CP CEO Keith Creel said in a statement.
The US regulator, the Surface Transportation Board (STB), has approved the use of a voting trust for the transaction. This move will allow KCS shareholders to receive payment after securityholders in both companies approve the deal, but before the STB gives final approval to the transaction.
KCS shareholders will thus receive 2,884 CP common shares and US $ 90 in cash for each KCS share they hold. Owners of preferred shares will receive US $ 37.50 in cash for each of their securities.
CP has said it expects the deal, which will also change its name to Canadian Pacific Kansas City, to be reached on December 14.
The review by U.S. regulatory authorities is expected to end in the fourth quarter of 2022, CP said.