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CP proxy statement asks KCS shareholders to vote against CN-KCS deal

Rail News Home Canadian Pacific 7/30/2021 Rail News: Canadian Pacific
image Canadian Pacific yesterday announced it filed a proxy statement asking Kansas City Southern shareholders to vote against the proposed CN-KCS combination at KCS' special meeting of stockholders scheduled on Aug. 19. CP is asking stockholders to vote against the proposed combination so that CN's proposed acquisition can be decided at a later date, when more information will be available to KCS stockholders. "CP has always said it wanted to do a friendly deal with KCS and that remains true," said CP President and Chief Executive Officer Keith Creel in a press release. "CP would have preferred not to appeal directly to KCS's stockholders, but given the impending vote on CN's proposal, we believe we have no choice. What we are doing here is simply contesting the vote on the CN-KCS proposal because a 'yes' vote now would lock KCS stockholders in until February 2022, instead of their being free to consider other, better, options.” CP wants to ensure that KCS stockholders are aware that a vote “without the benefit of an STB decision on the CN voting trust proposal and without a chance to consider other proposals until the spring of next year, would not be in their best interests," Creel added. CP maintains that its proposed merger with KCS “remains the only viable Class I combination,” according to the release. The STB has already approved CP’s use of a voting trust and affirmed KCS's waiver form the new rail merger rules it adopted in 2001 "because a CP-KCS combination is truly end-to-end, pro-competitive, and the only viable Class I combination," they said.

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CP unveils climate strategy to reduce emissions

Rail News Home Canadian Pacific 7/26/2021 Rail News: Canadian Pacific
image Canadian Pacific today released its first comprehensive Climate Strategy, which charts a path to reduce greenhouse gas emissions, adapt operations to the physical risks of climate change and further position the Class I as a leader in the transportation sector's transition to a low-carbon future. Building on CP's Climate Change Commitment announced last year, the Climate Strategy outlines the company's approach to drive innovative climate action and a measured response to emerging climate-related risks impacting the rail sector, CP officials said in a press release. The Climate Strategy outlines CP's objectives across five strategic pillars: establishing a clear understanding of climate-related risk and opportunities; reducing the company's carbon footprint; adapting operations to the physical risks of climate change; integrating climate factors across the business; and engaging with stakeholders on climate action. To guide implementation of the Climate Strategy, CP has established two science-based emissions reduction targets that address 100 percent of CP's Scope 1 and Scope 2 emissions, and more than half of Scope 3 emissions. CP commits to reducing Scope 1, 2 and 3 GHG emissions intensity of its locomotives by more than 38% by 2030. Locomotive operations represent CP's largest source of emissions. To support decarbonization across all operations, CP also commits to reducing absolute Scope 1 and Scope 2 GHG emissions from non-locomotive operations by in excess of 27% by 2030. "CP's Climate Strategy is ambitious, which we feel appropriately reflects the urgency of the fight against climate change. We look forward to collaborating with government, industry and research partners to create and test the new solutions required to achieve our targets," said CP President and Chief Executive Officer Keith Creel. CP's Climate Strategy, and supporting science-based emissions reduction targets, have been developed in alignment with the goals of the Paris Agreement and the Pan-Canadian Framework on Clean Growth and Climate Change, which seek to limit global temperature increases to well below 2°C.

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CP: Speculation over Lytton fire's cause is 'irresponsible'

Rail News Home Canadian Pacific 7/19/2021 Rail News: Canadian Pacific
image Canadian Pacific officials say that speculation over whether train operations sparked a wildfire that destroyed the British Columbia village of Lytton late last month is "irresponsible and misleading." CP issued a statement in response to the Transportation Safety Board (TSB) of Canada's investigation into whether rail operations are responsible triggered a wildfire that destroyed the village of Lytton in British Columbia. On June 30, smoke was spotted on the nearby hills around the pedestrian bridge which parallels the CN bridge at Lytton. Due to the high winds and dry conditions in the area, a fire, which had ignited, quickly spread to the Lytton, destroying many buildings and homes. Two fatalities were reported. TSB deployed an investigation team on July 9 to gather information and assess. In a statement given to the Canadian press, TSB Chair Kathy Fox said that a full TSB report on any train-related cause or contributing factors in connection to the Lytton fire could take up to two years. Additionally, Fox is reported to have stated that it "is certainly a wake-up call to really look at what precautions need to be taken by railway companies," CP officials noted in their statement. In light of the early stage of this TSB investigation, CP officials believe "it is irresponsible and misleading to imply that railways are to blame for the fire," according to CP’s statement. "A review of the key facts confirms that railways are not a significant cause of wildfires in B.C., contrary to media and government speculation,” CP officials said. “The vast majority of wildfires are caused by nature when environmental conditions are extremely hot and dry, like those recently experienced in B.C.” To read CP's statement in its entirety, click here.

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CP pledges funds to support wildfire recovery efforts in Lytton

Rail News Home Canadian Pacific 7/8/2021 Rail News: Canadian Pacific
image Canadian Pacific has pledged CA$1 million to support wildfire recovery efforts in Lytton, British Columbia. In addition to making monetary donations, CP has offered to work directly with the village of Lytton, Lytton First Nation, Thompson-Nicola Regional District and other agencies to provide resources and logistics support in the development of temporary housing for families that have been displaced, CP officials said in a news release. CP has been matching employee donations made to the Canadian Red Cross in support of disaster relief in the area, and encourages employees in Canada and the United States to continue donating to help residents. "Our thoughts are with all those affected by this devastating fire, including the CP employees who lost their homes," said Keith Creel, CP president and chief executive officer. "So many lives have been impacted. We hope that this support will help the community and the team of responders as they begin to recover and rebuild." A village of a population of about 250 people, Lytton went up in flames last week during extremely hot and dry conditions across the province. About 90% of the village was burned in the fire and two people died, according to media reports. Investigations into what sparked the fire are ongoing.

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CP: Grain shippers concerned about CN-KCS deal

Rail News Home Canadian Pacific 6/24/2021 Rail News: Canadian Pacific
image Canadian Pacific announced today that shippers of grain and other agricultural products across North Dakota, South Dakota and Minnesota have submitted letters to the Surface Transportation Board (STB) opposing CN's and Kansas City Southern's combination, its use of a voting trust, or both. The letters describe how a potential CN-KCS combination and its proposed use of a voting trust would see reduced options for agricultural shippers in the Upper Midwest leaving them fewer direct competitive options, and eliminating the new network of shipping options a CP-KCS combination would create, CP officials said in a press release. Meanwhile, CN and KCS announced that their proposed voting trust as part of their merger proposal now before the Surface Transportation Board has been endorsed by two major labor unions: the International Brotherhood of Boilermakers and the Sheet Metal, Air, Rail and Transportation Workers (SMART) Transportation Division. The letters from all parties are available for review on the STB website.

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CP to serve Richardson’s new grain elevator in Saskatchewan

Rail News Home Canadian Pacific 6/17/2021 Rail News: Canadian Pacific
image The project is expected to be completed by fall 2022. Photo – Richardson International/Facebook

Richardson Pioneer Ltd. this week announced construction has begun on a new high throughput grain elevator in Carmichael, Saskatchewan.

The project is expected to be completed by fall 2022. Canadian Pacific will serve the new elevator, which will feature 46,000 metric tons of storage capacity with a loop-rack rail design capable of loading 175 high-cube rail cars, Richardson officials said in a press release.

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CP asks public to speak out against CN-KCS deal

Rail News Home Canadian Pacific 6/14/2021 Rail News: Canadian Pacific
image CP is continuing to make a public case for its proposal to merge with KCS. Photo – cpr.ca

In a June 10 advertisement in The Washington Post and in a statement posted on its website, Canadian Pacific reiterated its stance that its proposed merger with Kansas City Southern is the "only viable" combination that would benefit Class I service, freight-rail competition and the environment.

CP is continuing to make a public case for its proposal to merge with KCS, which initially agreed to combine with CP but then pulled out of the pact to pursue a merger agreement with CN. 

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Merger update: CP touts opposition to CN's use of voting trust

Rail News Home Canadian Pacific 6/1/2021 Rail News: Canadian Pacific
image Canadian Pacific today announced that more than 130 stakeholders have filed statements with the Surface Transportation Board (STB) asking it to reject CN's proposed use of a voting trust. This brings the total letters submitted to more than 960, including 250-plus expressing concern about CN and Kansas City Southern's combination, its use of a voting trust, or both, and more than 730 in support of CP-KCS, CP officials said in a press release. The opposition letters — which came from shippers, ports, local governments, transportation associations and other stakeholders — highlight the "extensive risks" the proposed CN-KCS voting trust poses to competition by reducing shipper options, CP officials said. Stakeholders also expressed concerns over the likelihood of reduced service quality and infrastructure investments as a result of the proposed CN transaction, they added. The concerns echo those of the U.S. Department of Justice, which on May 14 filed comments with the STB objecting to CN's proposed use of a voting trust on the grounds that a CN merger with KCS would pose greater risks to competition than the CP-KCS agreement, according to CP.

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CP, Canadian government forge pact on Lac-Megantic bypass

Rail News Home Canadian Pacific 5/28/2021 Rail News: Canadian Pacific
image The Canadian government has reached an agreement with Canadian Pacific concerning the Lac-Megantic rail bypass. In collaboration with CP, the government has established an accelerated schedule that will enable the project to be completed in 2023. Work is expected to begin in spring 2022. The agreement is an important step toward obtaining the necessary plans, specifications and regulatory authorization to complete the project, government officials said in a press release. The pact includes several studies to be completed in the coming weeks on soil, water and fish habitat quality, and on ambient noise levels. “Transport Canada is committed to keeping property owners informed and minimizing the impact of the work while the studies are completed,” government officials said. The final right-of-way plan has been completed and negotiations to acquire the land now will begin with affected property owners. The 8-mile bypass will be built in response to the July 2013 Lac-Megantic rail disaster, in which an unattended crude-oil train — which had been parked in Nantes at the top of a slope — rolled down a hill before derailing at a high rate of speed in the city’s downtown area. The derailment led to an explosion and fire that killed 47 people and destroyed lots of property.

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CP calls on KCS board to reject CN's merger proposal

Rail News Home Canadian Pacific 5/20/2021 Rail News: Canadian Pacific
image Canadian Pacific today sent a letter to Kansas City Southern's board calling on members to reject CN’s proposal in light of intervening events and reaffirming its commitment to the pro-competitive CP-KCS combination under the preexisting merger agreement. Written by CP President and Chief Executive Officer Keith Creel, the letter emphasizes CP’s stance that CN's merger proposal "is illusory and simply an attempt to dismantle the unique, pro-competitive deal that CP and KCS" agreed to in late March. "While we respectfully disagreed with the KCS board's decision last week to deem the revised CN proposal a company superior proposal, we could understand how the KCS board might come to that decision given its fiduciary duties. Nevertheless, we have remained confident that the Surface Transportation Board (STB) would ultimately reject CN's proposal to use a voting trust, given that allowing CN to close into trust would not be in the public interest," Creel wrote. Creel also noted that after KCS received the revised CN proposal, a number of things occurred that should lead the KCS board to conclude that CN’s proposal is not "superior" as defined in the CP-KCS merger agreement. Those occurrences were the U.S. Department of Justice’s stated concerns about a CN-KCS merger and the STB's decision to apply more stringent merger rules to CN’s proposal. "Respectfully, we feel it would be destructive to our mutual interests to engage in a bidding war in reaction to CN's illusory offer, particularly where our existing CP-KCS Merger Agreement provides KCS's shareholders with a significant premium," Creel wrote. To read Creel’s letter in full, click here.

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CP reports more shipper support for merger with KCS

Rail News Home Canadian Pacific 5/10/2021 Rail News: Canadian Pacific
image Canadian Pacific today announced that another 131 stakeholders filed statements with the Surface Transportation Board (STB) on May 8 in support of its proposed merger with Kansas City Southern, bringing the total to close to 550 supporters across the transportation supply chain in North America, CP officials said in a press release. The statements follow previous filings with the STB in support of the CP-KCS transaction and those opposing CN’s counterbid for KCS. Customers and other supporters stated they expect the combination of CP and KCS, among other benefits, would invigorate transportation competition, expand access to existing and growing markets, and provide new service offerings that would improve transit times and reliability along the Canada-U.S.-Mexico corridor, CP officials said. Last week, the STB approved CP's use of a voting trust for its proposed combination with KCS. CP is seeking approval from the STB for the combination, which also remains subject to the approvals of CP and KCS shareholders, and other customary closing conditions. The STB review is expected to be completed by the middle of 2022.

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STB approves voting trust for CP’s proposed acquisition of KCS

The Surface Transportation Board (STB) has found that formal board review of the voting trust agreement for use in connection with the proposed transaction between Canadian Pacific Railway and Kansas City Southern Railway is warranted.

In the decision, the board determined that the proposed arrangement is acceptable with certain modifications, STB officials said in a press release.

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CP responds to CN's contention that STB apply same standards to voting trust proposals

Rail News Home Canadian Pacific 4/28/2021 Rail News: Canadian Pacific
image Canadian Pacific yesterday filed a letter with the Surface Transportation Board (STB) to address CN's contention that its voting trust proposal should be reviewed under the same standards and processes as CP’s regarding a proposed acquisition of Kansas City Southern. Last week, the STB ruled that a waiver provision under federal regulations applies to the potential transaction between CP and KCS. The 2001 regulation granted a waiver allowing a merger involving KCS and another Class I  to be considered under the STB’s pre-2001 merger regulations, subject to the board’s review. In late March, CP and KCS agreed to a merger deal in which CP would acquire KCS stock in a cash transaction worth $29 billion, including about $3.8 billion of outstanding KCS debt. A few weeks later, CN came in with what it characterized as a “superior” proposal to combine with KCS in a cash-and-stock transaction valued at $33.7 billion. In April 27 letter to the STB, CP noted that CN has asked regulators to subject a voting trust arrangement proposed by CP to the same preview process and standards that govern CN’s proposed voting trust in a transaction with KCS. CN's position is "fundamentally at odds with the very different factual contexts of the two voting proposals," CP officials wrote. "Accordingly, we respectfully submit that the Board should proceed to review each of the pending voting trust proposals under the different regulatory review processes and standards applicable to each of them." CP’s letter to the STB can be read here.

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CP posts 'solid' Q1 results; Creel comments on CN

Canadian Pacific yesterday reported first-quarter 2021 revenue declined to CA$1.96 billion from CA$2.04 billion a year ago, while net income climbed to CA$602 million from CA$409 million.

The Class I posted adjusted earnings per share (EPS) of CA$4.48, up 1% from CA$4.42 a year ago. Operating income declined to CA$780 million CA$834 million in the previous year’s quarter.

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CP, KCS garner more support for proposed merger

Rail News Home Canadian Pacific 4/12/2021 Rail News: Canadian Pacific
image Canadian Pacific Railway Ltd. and Kansas City Southern continue to accumulate support for their proposed merger, claiming that more than 375 customers, ports, transloaders and other stakeholders have filed letters of support with the Surface Transportation Board (STB). The latest supporters include XPO Logistics, CF Industries, Dollarama, Milar Western and Full Circle Ag, CP and KCS officials said in a press release. Similar to the shippers and others that filed favorable statements and letters with the STB on March 31 and April 6, the new supporters stated they expect the combination of CP and KCS would "invigorate transportation competition, expand access to existing and growing markets and provide new service offerings that wold improve transit times and reliability," the Class Is said. Many of the supporters also urged the STB to review the transaction as swiftly as possible. CP and KCS on March 21 announced they've entered a merger agreement in which CP would acquire KCS stock in a cash transaction worth $29 billion, including about $3.8 billion of outstanding KCS debt. Upon STB approval, CP would acquire control of KCS. The new railroad would be called Canadian Pacific Kansas City.      

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CP, KCS claim widespread support for merger agreement

Rail News Home Canadian Pacific 4/1/2021 Rail News: Canadian Pacific
image Canadian Pacific and Kansas City Southern announced yesterday they've received statements from nearly 260 shippers, other railroads, economic development authorities, ports and other supporters for the Class Is' planned merger agreement that would create the first rail network connecting the United States, Mexico and Canada. Many of the supporters have asked that the Surface Transportation Board (STB) approve the transaction as quickly as possible, CP and KCS officials said in a press release. Many letters filed with the board stated they expect the combined railroads would invigorate transportation competition, expand access to existing and growing markets and provide new service offerings that would improve transit times and reliability, they said. Supporters for the agreement include Genesee & Wyoming Inc. and other short lines, Maersk, Hyundai Glovis, Kraft, Nestle, North Dakota Dealers Association, Evergreen, Boise Cascade Wood products Building Materials, Ragasa Industries S.A. and Ag Processing. Their statements and letters were filed with the STB. CP and KCS on March 21 announced they've entered a merger agreement in which CP would acquire KCS stock in a cash transaction worth $29 billion, including about $3.8 billion of outstanding KCS debt. Upon STB approval, CP would acquire control of KCS. The new railroad would be called Canadian Pacific Kansas City (CPKC).

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CP honors U.S., Canadian 'Elevators of the Year'

Rail News Home Canadian Pacific 10/23/2020 Rail News: Canadian Pacific
image For the 2019-2020 crop year, CP recognized elevators on both sides of the Canada-U.S. border.Photo – cpr.ca

Canadian Pacific yesterday announced two winners of its Elevator of the Year award: Viterra Gull Lake (Canada) and CHS Northland Grain Hazel (U.S.).

The Class I presents the award annually to grain elevators that achieve high volumes from a single loading point while consistently demonstrating efficient rail-car loading and a strong commitment to safety, CP officials said in a press release.

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CP inks multiyear agreement with AP Moller-Maersk

Rail News Home Canadian Pacific 10/21/2020 Rail News: Canadian Pacific
image Canadian Pacific yesterday announced a strategic, multiyear agreement with A.P. Moller-Maersk to move freight through the ports in Vancouver and Montreal in Canada. The agreement is in addition to CP's agreement with Maersk, announced Sept. 15, to build and operate a transload facility in Vancouver, British Columbia, to expand the railroad's and Maersk Canada's supply chain options for customers. "We are proud to provide safe and efficient rail service to the world's largest shipping company, and with Maersk we see a strong relationship developing," said CP President and Chief Executive Officer Keith Creel in a press release. Under the latest agreement, CP is expected to begin moving Maersk traffic on March 1. The pact applies to both dry and refrigerated cargo.  

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CP posts lower revenue, earnings in Q3

Rail News Home Canadian Pacific 10/20/2020 Rail News: Canadian Pacific
image "Following our record Q2 performance, we steadily built momentum through the quarter and finished strong," said CP President and CEO Keith Creel.Photo – cpr.ca

Canadian Pacific today reported third-quarter 2020 revenue decreased 6% to CA$1.86 billion, diluted earnings per share (EPS) fell 1% to $4.41 and adjusted EPS dropped 11% to $4.12 compared with the same period a year ago.

The Class I posted an operating ratio of 58.2%, up from 56.1% in Q3 2019.

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CP joins TradeLens blockchain shipping platform

Rail News Home Canadian Pacific 10/9/2020 Rail News: Canadian Pacific
image Canadian Pacific announced yesterday it has joined TradeLens, a blockchain-based platform that enables the secure and transparent transfer of container-shipping documents. The open-API platform will help CP intermodal shippers create, amend and share documents with other supply chain participants, including consignees, beneficial cargo owners, customs agencies, dray operators and steamship lines, CP officials said in a press release. TradeLens was developed by IBM and A.P. Moller-Maersk specifically for use in the container shipping industry. It currently handles more than 700 million events and 6 million documents annually. The system integrates with users' in-house systems via nonproprietary, publicly available APIs designed for ease of setup and use. "Global shipping is a profoundly complex business, and TradeLens is improving the information-sharing processes that support the industry. CP is always innovating for the benefit of its customers, and joining TradeLens is an example of that innovation," said CP Vice President and Chief Information Officer Mike Redeker.  

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