A Canadian Pacific freight train travels around Morant's Curve in the Rocky Mountains near Baker Creek, Alta., on Dec. 3.Jeff McIntosh/The Canadian Press
Canadian Pacific Railway Ltd. says shareholders have given a big thumbs-up to its deal to buy U.S. railway Kansas City Southern .
CP says its stockholders voted 99.9 per cent in favour of issuing up to 278 million common shares to KCS shareholders, a key step in the agreement.
Shareholders at the Calgary-based railway also approved en masse of changing its name to Canadian Pacific Kansas City Ltd., though the new moniker must be approved by regulators in the United States.
CP agreed in September to buy KCS in a deal valued at US$31 billion, including the assumption of US$3.8 billion of debt, following a testy battle with Canadian National Railway Co., which was also looking to acquire the American railroad operator.
The U.S. regulator has approved the use of a voting trust for the transaction that allows KCS shareholders to receive payment after shareholders of both companies approve the deal but before it receives final approval.
A special meeting of KCS stockholders to vote on the merger is scheduled for this Friday, and CP says it expects the deal to close on Dec. 14.
Mexican regulators greenlighted the deal last month.
“The shareholder approvals today are a key step on our path to this once-in-a-lifetime partnership to create the first U.S.-Mexico-Canada rail network,” CP CEO Keith Creel said in a statement.
“The overwhelming support our shareholders have given today to the transaction is critical to making this combination a reality.”
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