(Updates with expert comment)

By Nandakumar D, Ann Maria Shibu and Rebecca Spalding

March 21 (Reuters) – Canadian Pacific Railway Ltd agreed on Sunday to acquire Kansas City Southern in a $ 25 billion cash and stock deal to acquire the first rail line in the United States, Mexico and Canada create that should benefit from a collection in retail.

It would be the largest combination of North American railways to date by transaction value. It does so amid a rebound in supply chains disrupted by the COVID-19 pandemic, and follows the ratification of the US-Mexico-Canada (USMCA) agreement last year that removed the threat of trade tensions escalated under the former US President Donald were Trump.

“Think about what we’ve been through and consider the importance of near-shoring in North America. This network is uniquely a supply chain that our customers and partners can actually benefit from and this opportunity to be able to use.” Keith Creel, chief executive of Canadian Pacific, told Reuters in an interview.

The combination must be approved by the US Surface Transportation Board (STB). Companies expressed confidence that this would happen by mid-2022, as the deal would bring together the smallest of the seven so-called Class I railways in the United States, which meet in Kansas City and have no overlap in their routes. The combined railroad would still be smaller than the remaining five Class I railways.

The STB updated its merger rules in 2001 to introduce the requirement that Class I railways demonstrate that a deal is in the public interest. However, due to its small size, Kansas City Southern was tax exempt, which may limit the audit of the takeover.

“I don’t see it as some kind of consolidation to be concerned about as it is an end-to-end or vertical merger. Your networks work well together and help fill North America with real service.” he told economist Clifford Winston, a senior fellow at the Brookings Institution who specializes in the transportation sector.

The story goes on

An STB spokesman said the regulator has not yet received any filing from the companies that would initiate their formal review process. He declined to comment further.

Still, in its negotiations with Kansas City Southern, Canadian Pacific agreed to bear the greatest risk that the deal would not go through. It will buy Kansas City Southern stock and place it in an independent voting foundation, isolating the acquisition target from its control until the STB closes the deal.

If STB refused to do so, Canadian Pacific would have to sell Kansas City Southern’s shares, and a source close to the arrangement suggested that it be sold to private equity firms or listed on the stock exchange. Kansas City Southern shareholders would keep their proceeds.

There is a $ 1 billion reverse breakup fee that the Canadian Pacific would have to pay to Kansas City Southern if the formation of the trust fails to complete, the source added.

Kansas City Southern shareholders will receive 0.489 shares in the Canadian Pacific and $ 90 in cash for each common share of Kansas City Southern held. Kansas City Southern is valued at $ 275 per share, a 23% premium over Friday’s closing price, the companies said in a joint statement. The deal is valued at $ 29 billion, including debt.

Kansas City Southern shareholders are expected to own 25% of the outstanding common stock of Canadian Pacific. Canadian Pacific said it will issue 44.5 million shares and borrow approximately $ 8.6 billion to fund the transaction.

It’s the top M&A deal announced so far in 2021. Despite being the largest ever two railroad companies, it lags behind Berkshire Hathaway’s acquisition of BNSF in 2010 for $ 26.4 billion. A fact box on the deal highlights can be found at:

Creel will continue to serve as CEO of the combined company, which will be headquartered in Calgary, the companies said in a statement.

The companies also highlighted the environmental benefits of the deal, saying the new single-line routes created by the combination would help move trucks off crowded U.S. freeways and cut emissions.

Rail is four times more economical than trucking, and one train can keep more than 300 trucks off public roads and produce 75% fewer greenhouse gas emissions, the companies said in the statement.

FAILED OFFERS

Canadian Pacific, based in Calgary, is Canada’s second largest rail operator behind Canadian National Railway Co Ltd with a market value of $ 50.6 billion.

It owns and operates a transcontinental rail freight company in Canada and the United States. Grain transportation is the company’s biggest revenue driver, accounting for around 58% of bulk sales and around 24% of total freight sales in 2020.

Kansas City Southern has national and international rail operations in North America and focuses on the north-south freight corridor that connects the commercial and industrial markets in the central United States with the industrial cities in Mexico.

Canadian Pacific’s most recent attempt to expand its U.S. business came after the company submitted a hostile offer of $ 28.4 billion for Norfolk Southern Corp. in April 2016. The merger negotiations between Canadian Pacific and CSX Corp, which owns a large network in the eastern United States, failed in 2014.

An offer by the Canadian National Railway Co, the country’s largest railroad, to purchase Burlington Northern Santa Fe owned by Warren Buffett was blocked by US antitrust authorities more than two decades ago.

A private equity consortium led by Blackstone Group Inc and Global Infrastructure Partners (GIP) unsuccessfully submitted the acquisition of Kansas City Southern last year. The sources said the offer helped reinvigorate the Canadian Pacific’s interest in Kansas City.

BMO Capital Markets and Goldman Sachs & Co. LLC are serving as financial advisor to Canadian Pacific, while BofA Securities and Morgan Stanley & Co. LLC are serving as financial advisor to Kansas City Southern. (Reporting by Nandakumar D and Ann Maria Shibu in Bengaluru; Rebecca Spalding and Greg Roumeliotis in New York Writing by Denny Thomas; Editing by William Mallard, Pravin Char, David Goodman, Andrea Ricci and Diane Craft)

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KEARNEY, Neb. (AP) – Vaccinations can slow the spread of COVID-19, but not the spread of hunger. Many people are still struggling with lost or reduced paychecks as the year-long pandemic drags on.

Thanks to Dick Cochran, Founder and President of Hot Meals USA, the US Department of Agriculture’s Farmers to Families nutrition program supports hungry people. The program is part of a $ 3 billion effort to distribute surplus produce, dairy and meat products to people with unsafe food.

Cars drove slowly into the Ag building on the Buffalo County Fairgrounds last week and stopped as volunteers loaded free boxes of groceries into their suitcases. People got as many boxes as they wanted.

No ID was required. No questions were asked.

The Kearney Hub reports that scenes like this have been repeated weekly since Cochran found out about the program in June last year and offered to oversee the distribution of the food here.

Cochran now puts in 40-60 unpaid hours a week, not just in Nebraska but in six other states. Much of his time is spent coordinating deliveries with the seller who the groceries came from.

“We’re talking about the location. We need to have a good flow of traffic and cover all the little details. Then we plan the semis so that it comes, ”he said.

Currently, Cochran works with the Liberty Food Company in Kansas City, but that may change. He has also worked with companies in Iowa and Kansas, and Cash-Wa in Kearney.

Deliveries are made in either a 48 foot semi with 960 crates of food and 960 gallons of milk or a 53 foot semi with 1,200 crates of food and 1,200 crates of milk.

Last week, 1,200 boxes of groceries arrived in Kearney from a supplier in Kansas City. Kyla Martin, an administrator who manages community projects for the Community Action Partnership in Mid-Nebraska, has received 300 more boxes of groceries from Cash-Wa. On Thursday, she and volunteers gave it away on the exhibition grounds.

Each box contained canned food, chicken, hot dogs, apples, Colby Jack cheese, tomatoes, lettuce, onions, and more. “And just in time for St. Paddy’s Day, red baby potatoes,” said Martin.

The efforts of Cochran and volunteers have helped deliver 625 box-laden semis to people in Nebraska, North Dakota, South Dakota, Minnesota, Iowa, Kansas, and Missouri. They helped feed more than 750,000 families with food problems during the pandemic.

“We deliver from Scottsbluff to Omaha and many places in between. Imagine 48 semis, each with 1,200 boxes of groceries and 1,200 gallons of milk. That is 57,600 families who are getting enough food for 20 meals and 57,600 gallons of milk. That’s 1,152,000 meals that won’t go to people with food problems until February, ”he said.

He worked hard getting a truck to Scottsbluff.

“They had never received food boxes from the USDA because of their location,” said Cochran. “The pantries in Nebraska are covered in Lincoln and Omaha, but after Lincoln they don’t know the rest of the state exists.”

He’s working on a plan to bring groceries to Texas shortly. Earlier this month, the federal government estimated that 56% of that state’s population had been affected by food because of the disaster, he said.

“We’ll never feed them all, but if we swing that we could feed 120,000 families a week. That’s 2,400,000 meals a week, ”he said. So far he has 1,200 volunteers ready to help through service clubs and other groups.

“Yes, I’m scared to death of it. Maybe I’m not smart enough to know that there is a reason no one has done this yet, but if we don’t try, it would be worse. So it’s in full swing, ”he said

The food is distributed every week in Kearney. So far it will last until March and last until the end of June, the first anniversary of the start of the program. The food was also delivered to Lexington.

“This program has taken on a life of its own. It was a real blessing, ”said Cochran. “With no buildings or staff, we’ve grown to become the largest food distributor in the state. It’s all done with volunteers and lots of prayers. “

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KEARNEY, Neb. (AP) – Vaccinations can slow the spread of COVID-19, but not the spread of hunger. Many people are still struggling with lost or reduced paychecks as the year-long pandemic drags on.

Thanks to Dick Cochran, Founder and President of Hot Meals USA, the US Department of Agriculture’s Farmers to Families nutrition program supports hungry people. The program is part of a $ 3 billion effort to distribute surplus produce, dairy and meat products to people with unsafe food.

Cars drove slowly into the Ag building on the Buffalo County Fairgrounds last week and stopped as volunteers loaded free boxes of groceries into their suitcases. People got as many boxes as they wanted.

No ID was required. No questions were asked.

The Kearney Hub reports that scenes like this have been repeated weekly since Cochran found out about the program in June last year and offered to oversee the distribution of the food here.

Cochran now puts in 40-60 unpaid hours a week, not just in Nebraska but in six other states. Much of his time is spent coordinating deliveries with the seller who the groceries came from.

“We’re talking about the location. We need to have a good flow of traffic and cover all the little details. Then we plan the semis so that it comes, ”he said.

Currently, Cochran works with the Liberty Food Company in Kansas City, but that may change. He has also worked with companies in Iowa and Kansas, and Cash-Wa in Kearney.

Deliveries are made in either a 48 foot semi with 960 crates of food and 960 gallons of milk or a 53 foot semi with 1,200 crates of food and 1,200 crates of milk.

Last week, 1,200 boxes of groceries arrived in Kearney from a supplier in Kansas City. Kyla Martin, an administrator who manages community projects for the Community Action Partnership in Mid-Nebraska, has received 300 more boxes of groceries from Cash-Wa. On Thursday, she and volunteers gave it away on the exhibition grounds.

Each box contained canned food, chicken, hot dogs, apples, Colby Jack cheese, tomatoes, lettuce, onions, and more. “And just in time for St. Paddy’s Day, red baby potatoes,” said Martin.

The efforts of Cochran and volunteers have helped deliver 625 box-laden semis to people in Nebraska, North Dakota, South Dakota, Minnesota, Iowa, Kansas, and Missouri. They helped feed more than 750,000 families with food problems during the pandemic.

“We deliver from Scottsbluff to Omaha and many places in between. Imagine 48 semis, each with 1,200 boxes of groceries and 1,200 gallons of milk. That is 57,600 families who are getting enough food for 20 meals and 57,600 gallons of milk. That’s 1,152,000 meals that won’t go to people with food problems until February, ”he said.

He worked hard getting a truck to Scottsbluff.

“They had never received food boxes from the USDA because of their location,” said Cochran. “The pantries in Nebraska are covered in Lincoln and Omaha, but after Lincoln they don’t know the rest of the state exists.”

He’s working on a plan to bring groceries to Texas shortly. Earlier this month, the federal government estimated that 56% of that state’s population had been affected by food because of the disaster, he said.

“We’ll never feed them all, but if we swing that we could feed 120,000 families a week. That’s 2,400,000 meals a week, ”he said. So far he has 1,200 volunteers ready to help through service clubs and other groups.

“Yes, I’m scared to death of it. Maybe I’m not smart enough to know that there is a reason no one has done this yet, but if we don’t try, it would be worse. So it’s in full swing, ”he said

The food is distributed every week in Kearney. So far it will last until March and last until the end of June, the first anniversary of the start of the program. The food was also delivered to Lexington.

“This program has taken on a life of its own. It was a real blessing, ”said Cochran. “With no buildings or staff, we’ve grown to become the largest food distributor in the state. It’s all done with volunteers and lots of prayers. “

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