Regulators reject key part of $33.6 billion railroad deal
ABC News
Canadian National’s $33.6 billion deal to acquire Kansas City Southern railroad is in jeopardy after federal regulators rejected a key part of the plan Tuesday and opened the door for a competing $31 billion offer from Canadian Pacific Railway
OMAHA, Neb. -- Canadian National’s $33.6 billion deal to acquire Kansas City Southern railroad is in jeopardy after federal regulators rejected a key part of the plan Tuesday and opened the door for a competing $31 billion offer from Canadian Pacific Railway. The Surface Transportation Board said Canadian National won’t be able to use a voting trust to acquire Kansas City Southern and hold the railroad while the board reviews the overall deal. It wasn’t immediately clear whether Kansas City Southern will want to move forward with the deal without a voting trust that would allow shareholders to get paid before the board embarks on its lengthy review of the deal. Plus, Kansas City Southern is now free to accept CP’s offer, which already has regulatory approval to move forward. The Surface Transportation Board said the “ proposed voting trust is not consistent with the public interest standard under the Board’s merger regulations.” Now that regulators have rejected Canadian National’s plan to use a voting trust, Kansas City Southern is due to receive a $1 billion breakup fee.More Related News