Benzinga | Aug 2, 2021 02:49PM EDT

Canadian Pacific Railway Issues Statement Following Surface Transportation Board Decision Related To Kansas City Southern Merger Application

Canadian Pacific Railway Limited (TSX:CP) (NYSE:CP) ("CP") issued the following statement in response to the Surface Transportation Board ("STB") decision today relating to materials sought by CP in preparing its application for authorization to control Kansas City Southern ("KCS"):

CP is gratified by the STB's decision released today, in which the STB confirms that CP may use the STB's discovery processes in the CP-KCS docket, Finance Docket No. 36500, to immediately seek from KCS the materials that are "relevant to its preparation of an application of authority to acquire control of KCS" to be filed in that docket.

The Board also noted that CP may seek a waiver from otherwise applicable informational requirements to the extent it cannot obtain information from KCS, such as due to KCS's "'reluctance to cooperate.'"

This decision validates CP's plan to submit its Application for authority to control KCS in the CP-KCS docket, which will present the STB with the only viable Class I combination that is in the public interest. CP looks forward to obtaining the needed information from KCS and completing and filing its Application.

CP-KCS remains the only viable Class 1 combination

The STB has already approved CP's use of a voting trust and affirmed KCS's waiver from the new rail merger rules it adopted in 2001 because a CP-KCS combination is truly end-to-end, pro-competitive, and the only viable Class 1 combination.

CP continues to pursue its application process to acquire KCS so that the pro-competitive CP-KCS combination can be reviewed by the STB and implemented without undue delay, in the event that KCS's agreement with CN is terminated or CN is otherwise unable to acquire control of KCS.

For more information on the benefits of a CP-KCS combination and the risks that a CN-KCS transaction would pose to the railway industry and North America, visit FutureForFreight.com.