The first major railroad merger in more than two decades will go forward after federal regulators approved Canadian Pacific’s $31 billion acquisition of Kansas City Southern. The two are the smallest among the nations seven major railroads, but their coupling will create the only railroad linking Canada, Mexico and the United States. The approval Wednesday by the U.S. Surface Transportation Board comes after an arduous two-year review. Railroads are under intensifying scrutiny following a fiery crash that forced evacuations in Ohio last month.
The Transportation Board said that the new direct service “will facilitate the flow of grain from the Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago and the trade in automotive parts, finished vehicles, and other containerized mixed goods between the United States and Mexico.” The combined company will have little to no track redundancies or overlapping routes, and is also expected to add more than 800 new union jobs in the U.S., according to the board. The new single-line service is expected to “foster the growth of rail traffic, shifting approximately 64,000 truckloads annually from North America’s roads to rail, and will support investment in infrastructure, service quality, and safety,” the board said.
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