Canadian Pacific Agrees to Buy Kansas City Southern for $25B

Canadian Pacific Railway Ltd. has agreed to buy Kansas City Southern for $25 billion in cash and stock, creating the first rail network linking the United States, Mexico, and Canada.

The deal values Kansas City Southern at $275 a share, based on Friday’s stock prices. Kansas City Southern shares closed Friday at $224 on the New York Stock Exchange.

The acquisition would need the approval of a U.S. regulator, the Surface Transportation Board. The companies said they expect the process to take until mid-2022.

The combined company would operate about 20,000 miles of railway, employ 20,000 people and generate annual revenue of about $8.7 billion. In a joint statement, the railroads said their merger is “expected to create jobs across the combined network.’’

They also said the deal would allow their customers seamless transportation throughout much of the U.S., Canada and Mexico.

The three countries last year entered into a revamped regional trade pact, negotiated by President Donald Trump, that is expected to encourage trade and investment across North America. Canadian Pacific CEO Keith Creel said that the so-called U.S.-Mexico-Canada Agreement “makes the efficient integration of the continent’s supply chains more important than ever before.’’

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