Federal regulators cleared the way for Canadian Pacific to take over Kansas City Southern to form a mega-railroad that stretches the length of the continent.
The U.S. Surface Transportation Board’s approval Wednesday marked the last remaining regulatory obstacle facing the $31 billion merger. It will create the first single railroad spanning Mexico, Canada, and the United States.
There’s no current overlap between the KC Southern and Canadian Pacific. The two lines meet in Kansas City. The Surface Transportation Board expects the combined railroad to take on more freight, shifting about 64,000 truckloads of freight a year onto the rails.
That’s going to increase freight train traffic through a busy north-south corridor from Chicago to Kansas City to Laredo, Texas — adding at least eight trains a day. Chicago and surrounding suburbs opposed the merger. They argued that more trains will tie up traffic, snarl commuter rail and raise the chance of a derailment.
Canadian Pacific will officially take control of Kansas City Southern as early as April 14. The new railroad will be called Canadian Pacific Kansas City (CPKC) and will be headquartered in Calgary, Alberta, Canada, with a U.S. base in Kansas City. The federal regulators projected the creation of about 800 union jobs in the United States.
The merger is the first large-scale combination of railroad systems in more than 20 years. And it means all of North America will be left with only six Class 1 railroads — two in the west, Union Pacific and Burlington Northern Santa Fe; two in the east, Norfolk Southern and CSX; with Canadian National and Canadian Pacific Kansas City running north and south in the middle.
KC Southern and Canadian Pacific are currently the smallest of the seven Class 1 railroads. Combining them will form the smallest of six Class 1 railroads.
This story originally listed the wrong regions for railroads not involved in the merger.
