KSU - A Key Regulator Just Gave Canadian Pacific a Boost in a $30 Billion Takeover Battle
A proposed merger between Canadian Pacific (NYSE: CP) and Kansas City Southern (NYSE: KSU) will not be judged under stringent guidelines for railroad deals put in place two decades ago, a huge boost to the Canadian railroad's effort to combine with the smaller target.
The two companies last month announced plans to combine in a $30 billion deal, the first major railroad merger since a 2001 deal moratorium put in place by the U.S. Surface Transportation Board (STB).
But on April 23, the STB granted a waiver exempting this deal from the tougher rules put in place along with the moratorium, saying it would consider only whether the deal is anti-competitive. Had they needed to meet the tougher guidelines, the onus would have been on the railroads to go beyond the competitive ramifications and to demonstrate why allowing the deal would be in the public interest.
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A Key Regulator Just Gave Canadian Pacific a Boost in a $30 Billion Takeover Battle