Canadian Pacific (CP) Railway’s plan to acquire Kansas City Southern (KCS) is one major step closer to becoming a done deal. The companies signed a merger agreement on Wednesday after rival Canadian National (CN) Railway waived its right to a five-day period to negotiate new terms with the coveted Kansas City-based railroad. The US$27.2 billion CP-KCS agreement, which still requires…
Canadian Pacific (CP) Railway’s plan to acquire Kansas City Southern (KCS) is one major step closer to becoming a done deal.
The companies signed a merger agreement on Wednesday after rival Canadian National (CN) Railway waived its right to a five-day period to negotiate new terms with the coveted Kansas City-based railroad.
The US$27.2 billion CP-KCS agreement, which still requires shareholder approval, would result in the formation of the first railroad linking Canada, the U.S., and Mexico.
CP says the combination would create direct rail links between Western Canada, the Upper Midwest, the Gulf Coast, and Mexico, while bringing new rail competition to northern midwest areas in the U.S. that are currently dominated by BNSF or UP.
CP has said it would maintain its global headquarters in Calgary, Alberta, and operate the combined railway under the new name “Canadian Pacific Kansas City,” or “CPKC.”
“Our path to this historic agreement only reinforces our conviction in this once-in-a-lifetime partnership,” said CP President and Chief Executive Officer Keith Creel, in a statement issued Wednesday.
KCS originally signed a merger agreement with CP in March 2021. That offer was eclipsed by a higher $29.6 billion bid from CN Rail in late April, however the U.S. Surface Transportation Board (STB) blocked the CN proposal in late August when it rejected the companies’ application to use a voting trust to complete the deal. In light of the STB decision, on September 12, the KCS board of directors said would once again pursue an agreement with CP. (See timeline below.)
KCS must now pay CN a breakup fee of $700 million, plus an additional $700 million to reimburse CN for covering KCS’s initial termination fee paid to CP back in May. Both of these payments are being covered by CP.
“While we are disappointed that we will not be able to deliver the many compelling benefits of this transaction to our stakeholders, the decision to bid for KCS was a bold and strategic move that still resulted in positive outcomes for CN,” said CN president and CEO JJ Ruest, in a statement shared early Wednesday. ”
We believe that the decision not to pursue our proposed merger with KCS any further is the right decision for CN as responsible fiduciaries of our shareholders’ interests,” continued Ruest.
The STB approved CP’s use of a voting trust in its plan to acquire KCS back in May. The CP offer is also exempt from U.S. rail merger rules adopted in 2001 since the CP and KCS networks do not overlap.
KCS’s board has not yet said when the shareholder vote on the CP merger agreement will take place, just that it will be held “in due course.”
The Canadian railway battle for Kansas City Southern — a timeline:
March 21 — CP Rail announces a US$25 billion stock and cash agreement to acquire Kansas City Southern (KCS) railway and create the first rail freight network to link Canada, the U.S., and Mexico. The CP and KCS rail networks meet in Kansas City, but do not overlap anywhere. The railway would be known as Canadian Pacific Kansas City or CPKC.
April 20 — CN Rail announces a premium bid to acquire Kansas City Southern that values KCS at over US$29 billion. CP Rail CEO Keith Creel says his railway will not get into a bidding war for KCS.
May 6 — The U.S. Surface Transportation Board (STB) approves CP Rail’s plan to use a voting trust to control KCS’ assets while the deal is finalized. The STB also confirms KCS is exempt from rail merger rules implemented in 2001, since the CP and KCS rail networks do not overlap.
May 14 — The KCS board of directors says it views CN Rail’s merger proposal as the superior offer, and terminates the March 21 agreement with CP. KCS pays CP a $700 million break-up fee, which CN covers.
July 9 — U.S. President Joe Biden issues an executive order focused at increasing competition among railways. It also requires freight railroads to provide rights of way to passenger rail, increasing regulatory uncertainty around the CN-KCS deal.
August 10 — CP Rail raises its offer for KCS to $27.2 billion.
August 31 — The STB unanimously rejects the application by CN and KCS to use a joint voting trust, saying the railways have not shown that it is in the public interest, forcing CN to rework its bid. CP sets a September 12 deadline on its offer.
Early September — CN’s executive faces pressure from major shareholders to drop its pursuit of KCS.
September 12 — KCS board of directors deems CP’s $27.2 billion offer as superior, given the STB ruling against the CN proposal.
September 15 — KCS and CP sign merger agreement, after CN waives its opportunity to renegotiate terms. KCS must now pay CN $700 million break-up fee, plus reimburse CN for covering earlier termination fee paid to CP. CP to cover both payments.
Statistics Canada’s latest production estimates puts soybean production for 2021 down 7.4 per cent year over year to 5.9 million tonnes. Corn production is expected to climb, however, to 14.4 million tonnes…
Statistics Canada’s latest production estimates puts soybean production for 2021 down 7.4 per cent year over year to 5.9 million tonnes.
Corn production is expected to climb, however, to 14.4 million tonnes in 2021. Much of that increase is from Ontario, where corn production is expected to increase 7.5 per cent to 9.6 million tonnes, on higher yields (+9.3 per cent to 179.1 bushels per acre). This would offset a lower harvested area, which is expected to fall 1.6 per cent to 2.1 million acres.
The decline in soybean production is because of lower than expected yields, predicted to drop 11.7 per cent to 40.9 bushels per acre, nationally. Harvested area is anticipated to rise 4.8 per cent to 5.3 million acres.
Ontario is projected to produce 2.8 per cent fewer soybeans in 2021 for a total of 3.8 million tonnes; average yield is anticipated to decrease 5.9 per cent to 47.7 bushels per acre.
In Manitoba, soybean production is projected to decrease 22.2 per cent to 905 000 tonnes in 2021. Harvested area is expected to increase 13.5 per cent to 1.3 million acres. However, yields are projected to fall 31.4 per cent year over year to 25.6 bushels per acre due to dry conditions in the province.
In Quebec, soybean production is projected to decrease 6.9 per cent to 1.1 million tonnes on lower yields (-11 per cent to 43.1 bushels per acre), which will more than offset the projected 4.5 per cent increase in harvested area.
Those in Western Canada looking for hay and those in other areas willing to supply hay for the Hay West 2021 initiative can now access a web portal to connect.…
Those in Western Canada looking for hay and those in other areas willing to supply hay for the Hay West 2021 initiative can now access a web portal to connect.
The Canadian Federation of Agriculture has launched HayWest2021.net where individuals and businesses can enter the pertinent details of their situation and await word.
The program is being run on a break-even basis, with hay being bought and sold at cost at $0.10/lb. Freight is being covered by funding through Agriculture and Agri-Food Canada.
While every effort will be made to link farmers and ranchers with available supplies, the CFA warns that applying for hay does not guarantee that there will be enough to go around.
Check out the site here: https://www.haywest2021.net/
BASF Canada has received registration approval from the Pest Management Regulatory Agency for Veltyma fungicide. Veltyma provides broad spectrum control against key leaf diseases on multiple crops including corn, potatoes,…
BASF Canada has received registration approval from the Pest Management Regulatory Agency for Veltyma fungicide.
Veltyma provides broad spectrum control against key leaf diseases on multiple crops including corn, potatoes, wheat, and soybeans, including Group 3 resistant biotypes, says the company.
The product is registered for broad spectrum control against northern corn leaf blight, tar spot, common rust, eyespot, and gray leaf spot in corn. It is also registered for protection against early blight, black dot, and brown spot in potatoes. In wheat, it’s registered for control against septoria leaf blotch, leaf rust, stripe rust, and tan spot.
Veltyma contains pyraclostrobin (Group 11) and mefentrifluconazole (Group 3), a combination also known as Revysol. BASF says that Revysol’s unique molecular structure binds target enzymes more powerfully than other Group 3 products, providing performance on a broad spectrum of diseases.
“We know that farmers need new and innovative solutions to manage issues today, while at the same time, addressing the challenges of tomorrow. We are thrilled to be able to bring Veltyma – with the new active ingredient Revysol – to Canadian growers,” says Trevor Latta, brand manager for corn, soybean and horticulture. “Veltyma provides growers with the best of both worlds: multiple modes of systemic residual activity while delivering proven plant health benefits, including increased growth efficiency and greater yield potential. With the launch of Veltyma, we are setting a new standard of disease control.”
Veltyma will be available for purchase in the 2022 growing season.
Just a few weeks ago, Statistics Canada pegged the 2021 canola crop at over 14 million tonnes. The latest report out of the department has decreased that estimate further, to…
Just a few weeks ago, Statistics Canada pegged the 2021 canola crop at over 14 million tonnes. The latest report out of the department has decreased that estimate further, to 12.8 million tonnes.
“Canola production is expected to fall 34.4 per cent to 12.8 million tonnes in 2021, as drought conditions on the Prairies drove yields to their lowest level in a decade (-39.5per cent to 25.3 bushels per acre), offsetting higher harvested area (+8.1 per cent to 22.2 million acres). If this were to happen, this would be the lowest canola production since 2010,” the StatsCan report published September 14th reads.
Canola production in Saskatchewan is expected to decrease 47.2 per cent to 5.8 million tonnes; Alberta is expected to decrease 17.1 per cent to 4.3 million tonnes; and in Manitoba, yield is expected to fall 21.3 per cent to an average 32.6 bushels per acre.
This latest report is based on StatsCan’s Crop Condition Assessment Program (CCAP) which indicates that overall plant health in Western Canada was lower to much lower than normal, having decreased considerably throughout August. This indicates the likelihood of lower than normal yields, StatsCan says.
As of the end of August, provincial government departments reported harvest well ahead of average. Alberta reported that over one-quarter (26 per cent) of the major crops had been harvested, well over double last year’s harvest season (10 per cent) and the 2016-to-2020 five-year average (11 per cent); Saskatchewan was at 40 per cent harvested, up from 28 per cent last year and the five-year average (22 per cent); and Manitoba reported harvest progress at 35 per cent, up from 13 per cent last year and the five-year average of 28 per cent.