The merged entity will operate around 20,000 miles of rail. Credit: Mathias Westermann from Pixabay.

The $31bn merger deal of Canadian Pacific Railway (CP) and Kansas City Southern (KCS) has received the green light from the US Surface Transportation Board (STB).

Subject to certain conditions, the board approved the merger that will form a new entity called Canadian Pacific Kansas City (CPKC).

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Furthermore, CP is evaluating the details of the 212-page decision to assume control of KCS on or after 14 April for the formation of the new entity.

CP announced the acquisition of KCS in September 2021 and concluded the deal in December of the same year following a protracted bidding war with Canadian National (CN).

As part of the deal, it will take on KCS’ $3.8bn outstanding debt.

Based in Calgary, Canada, the new entity will operate around 20,000 miles of rail and employs around 20,000 people.

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CPKC will be the first single-line rail network, linking the US, Mexico, and Canada. 

The complete integration of the entities is scheduled to occur over the next three years.

CP president and CEO Keith Creel said: “A combined CPKC will connect North America through a unique rail network able to enhance competition, provide improved reliable rail service, take trucks off public roads and improve rail safety by expanding CP’s industry-leading safety practices.”

KCS president and CEO Patrick Ottensmeyer said: “The KCS Board of Directors and management team are very proud of the many contributions and achievements of the people who have made KCS what it is today and we are excited for the boundless possibilities as we move forward into the next chapter as CPKC.”