World Grain - April 2021 - 10

NEWS REVIEW

CP to merge with KCS in $29 billion deal

KANSAS CITY, MISSOURI, US - Canadian Pacific Railway
(CP) has agreed to purchase the Kansas City Southern (KCS)
railroad in a transaction valued at $29 billion. The first USCanada-Mexico rail network would allow grain companies
and other shippers greater efficiency and supply chain integration as trade ramps up due to the passage of the USMCA pact
of 2020.
The combined rail company, to be named Canadian Pacific
Kansas City, is expected to generate greater competition as it
expands to 20,000 miles of rail and 20,000 employees. With
expected revenues of about $8.7 billion, the merged rail network will remain the smallest of six Class 1 railroads.
CP and KCS officials called the merger " a game changer "
for shippers from the agriculture sector.
" This deal links the origination in production-rich origins
that CP has to new export and domestic consumption markets that we simply just can't get to today, " said John Kenneth
Brooks, executive vice president and chief marketing officer
of CP, in a March 22 conference call with investors. " It gives
our corn, our soybean, our wheat, our canola producers and
shippers, our grain products ... meals and oils and ethanol
- all these commodities gain additional domestic markets.
They gain routes to the Gulf of Mexico and, of course, into
Mexico itself. "
CP and KCS pointed to several examples of increased efficiency upon completion of the merger. Expensive, sometimes lengthy interchange operations could be streamlined at
the two rail lines' sole connection point, a shared facility in
Kansas City. Some rail traffic on KCS lines will be able to
bypass Chicago, taking an Iowa route instead to reach Upper
Midwest and Canadian destinations. That will reduce rail traffic, fuel burn and emissions at the Chicago hub.
Other sustainability improvements could unfold as new
Longtime miller Mathieson dies at 72
PORT COLBORNE, ONTARIO, CANADA - Neil
Mathieson, a longtime flour miller who received several accolades from the International Association of Operative Millers
(IAOM), died on Feb. 24 at the age of 72.
Mathieson, who was an active member of the IAOM until
his retirement, received the Thaddeus B. Bownik Outstanding
Service Award in 2009 and was named the Milling Operative
of the Year in 2001.

single-line routes come online. Significant shipping volumes
could move from highways to rails, where one train can keep
300 trucks off public roads, reducing emissions and repairs to
roads and bridges, CP said.
Under the agreement announced March 21 with full support from the boards of directors from each company, CP will
purchase KCS in a stock and cash transaction to include assumption of $3.8 billion in KCS debt.
CP is expected to acquire KCS shares in the latter half of
2021 and enter a process of seeking approval from the Surface
Transportation Board and other applicable regulatory agencies. An STB review is expected to be completed by mid-2022.
Keith Creel, president and chief executive officer of CP, will
retain his CEO role in the merged company.
" This transaction will be transformative for North America,
providing significant positive impacts for our respective employees, customers, communities and shareholders, " Creel
said. " This will create the first US-Mexico-Canada railroad,
bringing together two railroads that have been keenly focused
on providing quality service to their customers to unlock the
full potential of their networks. "

Mathieson was an apprentice with J&R Snodgrass Flour
Mills in Glasgow, Scotland, in 1963. He emigrated to
Montreal, Canada, in 1968 to work with Maple Leaf Mills as
plant manager. He had later assignments in Haiti and Trinidad
before returning to Canada with his wife Janet and children
Paul and Andrea.
Mathieson worked for Robin Hood Multifoods Inc. from
September 1983 to June 2004.

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World Grain - April 2021

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