https://seekingalpha.com/amp/news/3674613-canadian-pacific-to-buy-kansas-city-southern-for-25-billion
Catch em while you can
YESSSSS!!!!! Finally!!!
Bloomberg article.
Canadian Pacific Said Near $25 Billion Kansas City Southern Deal - Bloomberg
The first post link said STB already approved purchase. Rail eagle ""IMO no way.
And from Financial Times as well. Just didn't expect this to happen late on a Saturday night though. https://www.ft.com/content/9d4c383a-b3ee-415d-beaf-3cc7a6dc5993
How can STB approve if (as of Friday) there isn't a finance docket (FD-) yet?
This looks like a April fools that leaked too early...
This purchase does make sense.
KCS operates in Mexico also, and I imagine they will say no.
Will STB consider this a 'Major' tranaction?
Never too old to have a happy childhood!
Big news maybe but likely just wishful thinking until STB grants approval. Government approval with strings attached won't come quickly..
I've wondered how KCS managed to remain a survivor, when all other similar sized Class I's have been absorbed decades ago.
Given the similarities with KCS and the IC, this seems to have been the perfect move for CP right after the CN/IC merger. Don't know why it took so long.
Great news and I kind of suspected it earlier as Milwaukee Road had a relationship with KCS in KC that Soo Line and then CP kind of inherited. CP will give KCS the Capital it needs to continue to upgrade it's line in South Texas as well. Texas will become a trading gateway for North-South trade for U.S. and Canada, more jobs for Texas.
BLS53I've wondered how KCS managed to remain a survivor, when all other similar sized Class I's have been absorbed decades ago.
KCS used their heavy debt and then their increased size (KCS de Mexico) as kind of a poison pill takeover defense. CP just gained so much access to capital the debt and size obstacles were no longer an impediment.
I'm gonna surmise that anyone commenting "great news" has never been a rail shipper during a merger. If promises of merger related improvements were currency, shippers would have been millionaires after the last round of Class 1 mergers.
Balt, back in the day when the STB revamped merger rules as a result of the proposed Santa Fe-CN merger, they left KCS in the "old rules" category. The old rules, if I remember correctly, were geared toward merger approval, while the new rules were more stringent.
At the same time, both carrriers are Class I so it will almost assuredly have to be a major transaction.
Now that this is official. CP will be a force to reckon with in Automotive. The Big 3 now have access to single line service from the Midwest to Mexico. This part is what I'm most curious, and excited about with this combination. CP will more than likely make a move on CSX's Grand Rapids Line between Porter, IN and Detroit. They'll need their own RoW now between Chicago and Detroit. Expect a future annoucnement on a new Detroit-Windsor Rail Tunnel.
azrail KCS operates in Mexico also, and I imagine they will say no.
KCS bought out the Mexican share of KCS de Mexico in 2005. So if your referring to the Mexican government blocking the merger. Not sure on what grounds they would do so because the Merged track or track consolidation would be entirely outside of Mexico. And had they wanted to object they would have objected to the 2005 buy out but they did not. The merged system is in the national interest of Mexico as well in regards to lengthening their reach into the U.S. and Canada.
Will NS try to acquire full ownership of the Meridian speedway ?
Juniata ManI'm gonna surmise that anyone commenting "great news" has never been a rail shipper during a merger. If promises of merger related improvements were currency, shippers would have been millionaires after the last round of Class 1 mergers.
CP-KCS is basically a end to end merger, so there is not much in the way of duplicate lines to be eliminated as there were in most of the rest of the Class 1 mergers. The elimination of duplicate lines and thus competition at locations those lines served.
Balt:
"End to end" isn't what it used to be.
Where this will have a negative competitive impact is at Canadian origins with interswitching that ship to KCS destinations in the south central US.
Under the current environment, a Canadian shipper can use either CP or CN to handle the first half to two thirds of a linehaul to say a point in Arkansas, Louisiana, Texas or Mississippi. If CP controls KCS, that option goes away as CP will insist on a maximum linehaul.
Of course, the reverse is true for a US shipper originating on KCS going to Canadian destinations at which they currently can negotiate with both CP and CN and select the better option.
CW
The combined parent company will be called "Canadian Pacific Kansas City"(?)
It sounds like CP and KCS will be kept as separate companies, due to different labor laws/Union agreements between the 3 countries
CP gets a second trancontinental out of the deal too... across Panama. No mention of this in any article I've seen thus far. KCS currently owns 50% of the Panama Canal Railway.
azrail The combined parent company will be called "Canadian Pacific Kansas City"(?) It sounds like CP and KCS will be kept as separate companies, due to different labor laws/Union agreements between the 3 countries
Actually Soo Line, DM&E and IC&E still exist on paper under the CP corporate umbrella.
KCS is likely to be acquired in a similar fashion.
SD60MAC9500 CP will more than likely make a move on CSX's Grand Rapids Line between Porter, IN and Detroit. They'll need their own RoW now between Chicago and Detroit.
CP will more than likely make a move on CSX's Grand Rapids Line between Porter, IN and Detroit. They'll need their own RoW now between Chicago and Detroit.
Except the PM won't get them what the "need". First, I doubt the line from Plymouth to Detroit is for sale. Second, as you state, the westbound end of the line is in Porter In. So CP "needs" their own right a way between Chicago and Detroit, so it buys a railroad from NW Indiana to Plymouth Michigan? Such a route would still require trackage rights between Porter and Chicago over the NS, which is the busiest portion of the route. Such a route would still require rights over CSX from Plymouth to Detroit, which can be congested at times.
One also has to ask if the portion from Porter to Holland is even for sale? West Olive is supposed to be in operation until 2030, which on average takes one coal train a day. That is a lot of revenue to get rid of.
It also overlooks the fact that it really is not a good route. Short sidings, a hill that requires east bounds to have a helper if over 10k tons (12k if 1+1 DP), and an ancient signal system. I think the CP will keep the route they have, trackage rights over the NS via Elkhart will serve the well.
An "expensive model collector"
This could possibly be another of those scenarios that was [played put in the 1980's.... [Possibly remember the "Koda chrome SP/AT&SF era"? That one got stepped on pretty hard by STB and 'denied'; leaving the scene with yellow and red fleets, some with big SP's, and some with SF's for identifications....
So don't get too anxious....After all, "....It ain't over til the fat lady sings..."
Everyone seems to be cncerned that the current major concern, being what'll happen in the PNW, and down the Left Coast?
Do npt forget that KCS Rwy may be a 'center of the Country' Operation, connecting Choicago, St. Louis and NOLA; It also within its 'system' accesses a half dozen Gulf Coast Ports, Deep Sea River access points, and has lines all the way to Central Mexico. Not to also mention the mexican port of Lorenzo Cardenas, on the West Coast of Mexico. And then, there is 1/2 ownership(?) of the 'Meridian Speedway' with NS; which then gets them into Central Tennessee, Mississippi and Alabama Gulf ports, and also western Florida (@ Pensacola).
So that $ 25 B price tag begins to look like a pretty good deal?
How about a "Wabash Speedway" deal with NS to Detroit and bypass Chicago?
I was looking at their roster curious how the dominos might fall there if this is successful, and saw that they were apparently down to six SD60's on the Panama Canal Railway. When did their sizeable SD60 fleet go?
Will be odd potentially seeing a GP40-2LW in CPR colors.
kgbw49 azrail The combined parent company will be called "Canadian Pacific Kansas City"(?) It sounds like CP and KCS will be kept as separate companies, due to different labor laws/Union agreements between the 3 countries Actually Soo Line, DM&E and IC&E still exist on paper under the CP corporate umbrella. KCS is likely to be acquired in a similar fashion.
I think IC&E was combined into DM&E and no longer exists, even on paper. I remember reading a request submitted to the STB by CPRS to allow SOO and DM&E to have trackage rights over each other between physical interchange points to various points on each railroad. Some of the points were former IC&E locations.
CPRS said it was to improve customer service. Many took it to mean letting lower paid DM&E crews to run farther instead of higher paid SOO crews.
Jeff
n012944 SD60MAC9500 CP will more than likely make a move on CSX's Grand Rapids Line between Porter, IN and Detroit. They'll need their own RoW now between Chicago and Detroit. Except the PM won't get them what the "need". First, I doubt the line from Plymouth to Detroit is for sale. Second, as you state, the westbound end of the line is in Porter In. So CP "needs" their own right a way between Chicago and Detroit, so it buys a railroad from NW Indiana to Plymouth Michigan? Such a route would still require trackage rights between Porter and Chicago over the NS, which is the busiest portion of the route. Such a route would still require rights over CSX from Plymouth to Detroit, which can be congested at times. One also has to ask if the portion from Porter to Holland is even for sale? West Olive is supposed to be in operation until 2030, which on average takes one coal train a day. That is a lot of revenue to get rid of. It also overlooks the fact that it really is not a good route. Short sidings, a hill that requires east bounds to have a helper if over 10k tons (12k if 1+1 DP), and an ancient signal system. I think the CP will keep the route they have, trackage rights over the NS via Elkhart will serve the well.
I didn't realize the Campbell plant would be in operation till 2030. I had to do some catching up. They're expecting unit #3 the last after 2031 to shut down in 2040. In that regard coal is paying the bills until then.
I forgot about the hill at I think Saugatuck?
Given the potential for increased traffic from Canada to Mexico through KC, does anyone have any thoughts as to where 15,000-foot sidings can be installed between La Crescent, MN and Bettendorf, IA?
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