Two of North America's largest railroad companies announced a merger Sunday that would connect freight customers to Canada, the United States and Mexico on a single network for the first time in history. Canadian Pacific (CP) agreed to purchase Kansas City Southern (KSU) in a deal worth about $25 billion after discounting $3.8 billion of KCS debt that Canadian Pacific will take on. It would combine two of the industry's fastest-growing rail companies at a time when online purchases have soared, overwhelming ports and delaying shipments.
The companies said in a statement that the deal would help them become more competitive. That could become increasingly important as the USMCA -- the revised NAFTA trade deal between the United States, Canada and Mexico -- takes hold. The combined company would operate 20,000 miles of rail, employing nearly 20,000 people and generating annual sales of about $8.7 billion.