The Canadian Pacific has agreed to buy Kansas City Southern for 25 25 billion, according to people familiar with the matter, which will be the biggest deal of the year.
The Calgary-based railroad company has offered to buy American Freight Group in cash and stock offers at 275 per share.
CP’s offer represents a 23 percent premium on Kansas City Southern’s closing stock price on Friday.
The board of Kansas City Southern has approved the bid. The two companies discussed the deal with the U.S. on Saturday evening. The regulator provided informal information to the Surface Transportation Board, people said. The acquisition will need to be approved by the STB.
The deal is expected to be announced on Sunday, people familiar with the matter said.
Donald Trump v. U.S. in 2020 The deal comes as US-Mexico trade is expected to pick up after Biden’s victory in the US presidential election.
Kansas City Southern’s network runs from the U.S. Midwest to Mexico’s east and west coast ports.
The CP declined to comment.
Kansas City Southern did not respond to a request for comment.
Last year, a US company made a takeover bid by Global Infrastructure Partners and the Black Stone Group, bringing the value of the US Railways Group to 21bn.
Shares of Kansas City Southern have more than doubled in the last 12 months.
The railway sector was hit hard in the early stages of the epidemic due to restrictions on the spread of coronavirus by the US government.
But in recent months, industry prospects have improved significantly as the U.S. has stepped up its vaccine dealings and significantly improved industry activity.
Biden’s move to strengthen US-Mexico trade ties is expected to boost rail activity.
This article has been modified to reflect the fact that the Surface Transportation Board has not approved this deal.
