Kansas City Southern shareholders have approved the railroad’s takeover by Canadian Pacific Railway.
This means that railroad will close by the end of the year, and is expected to result in savings and increased revenues of more than $300 million a year. CP Rail is expected to keep all 1,800 employees at Kansas City Southern, plus 1,500 railroad workers under a management contract.
Canadian Pacific Railways, which has the option to take over Kansas City Southern this summer, says that it “remains confident that the company will successfully close its proposed acquisition” of Kansas City Southern. “It will allow both companies to capitalize on the opportunities and talents that will be created by joining forces,” a CP spokesman said in a statement.
However, CP’s CEO Keith Creel has made the merging of the two companies a priority. “Together, Kansas City Southern and CP can create a higher-performing, more innovative competitor for decades to come,” he said in a statement in January.
Leaving Kansas City Southern in 2019, however, has been a big change for Kansas City Southern. Its employees, many of whom live in the Kansas City area, voted against the takeover, fearing their jobs would be eliminated. (About 700 KCS employees are based in Kansas City.) However, although no workers’ jobs are directly threatened in Canada, it is unclear exactly what work will be integrated by the two companies. Many of its operations, like leases and contracts, are worth more to KCS, and could be divided up between the two companies.
This is not the first time there has been concern for jobs in Kansas City. In 2016, the railroad briefly looked to sell itself. The takeover was announced in December, and CP Rail had already promised to keep jobs and honor any contracts if Kansas City Southern became part of its operations.
Read the full story at Bloomberg.
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