Canadian Pacific Railway Ltd. agreed to acquire Kansas City Southern a cost about $25 billion. that creating the first freight-rail network linking Mexico, the U.S. and Canada. The deal will require a long regulatory review.
To fund the merger’s stock consideration, CP will issue 44.5 million new shares. The cash portion will be funded through a combination of cash-on-hand and raising approximately $8.6 billion in debt, for which financing has been committed. As part of the merger, CP will assume approximately $3.8 billion of KCS’ outstanding debt. Following the closing into trust, CP expects that its outstanding debt will be approximately $20.2 billion.
