CP Rail shareholders green-light purchase of Kansas City Southern

CP says its stockholders voted 99.9 per cent in favour of issuing up to 278 million common shares to KCS shareholders, a key step in the agreement.

CALGARY - Canadian Pacific Railway Ltd. says shareholders have given a big thumbs-up to its deal to buy U.S. railway Kansas City Southern.

CP says its stockholders voted 99.9 per cent in favour of issuing up to 278 million common shares to KCS shareholders, a key step in the agreement.

Shareholders at the Calgary-based railway also approved en masse of changing its name to Canadian Pacific Kansas City Ltd., though the new moniker must be approved by regulators in the United States.

CP agreed in September to buy KCS in a deal valued at US$31 billion, including the assumption of US$3.8 billion of debt, following a testy battle with Canadian National Railway Co., which was also looking to acquire the American railroad operator.

The U.S. regulator has approved the use of a voting trust for the transaction that allows KCS shareholders to receive payment after shareholders of both companies approve the deal but before it receives final approval.

A special meeting of KCS stockholders to vote on the merger is scheduled for this Friday, and CP says it expects the deal to close on Dec. 14.