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RAIL EMPLOYMENT & NOTICES



Rail News Home M&A

3/17/2023



Rail News: M&A

CP sets date for combination with KCS, announces CPKC leadership team


KCS President and CEO Patrick Ottensmeyer (left) will continue as an adviser to CP President and CEO Keith Creel (right), who will be the top executive at CPKC.
Photo – Kansas City Southern and Canadian Pacific

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Two days after the Surface Transportation Board approved their merger plan, Canadian Pacific and Kansas City Southern officials today announced they expect the two Class Is to officially combine as CPKC on April 14.

Also announced are CPKC's anticipated senior leaders, subject to formal appointment by the board. As previously announced, CP President and CEO Keith Creel will become the top executive of the merged railroad. Reporting to Creel will be:

    •    Nadeem Velani, executive vice president and chief financial officer;
    •    John Brooks, EVP and chief marketing officer;
    •    Mark Redd, EVP and chief operating officer;
    •    John Orr, EVP and chief transformation officer;
    •    James Clements, EVP of strategic planning and technology;
    •    Jeff Ellis, EVP, chief legal officer and corporate secretary;
    •    Warren Erdman, executive adviser for strategic projects;
    •    Laird Pitz, senior VP and chief risk officer;
    •    Mike Foran, SVP of network and capacity management;
    •    Chad Rolstad, VP of human resources and chief culture officer; and
    •    Oscar Augusto Del Cueto Cuevas, KCSM president, general manager and executive representative.

KCS President and CEO Patrick Ottensmeyer has agreed to serve as an adviser to Creel through 2023 to ensure continuity on key initiatives, predominantly involving the combined company and Mexico.

"Under the leadership of the exceptional group of railroaders we announce today, CPKC will bring new options to rail customers while increasing safety, improving service and spurring new investment in our railroad network," Creel said in a press release. "Together, all these benefits will create jobs and drive economic growth in North America."

CP completed its $31 billion acquisition of KCS on Dec. 14, 2021. KCS shares were placed into a voting trust that has ensured the company operates independently of CP during the regulatory review process. Until CP exercises control pursuant to the STB's March 15 decision and the voting trust is dissolved, CP and KCS will continue to operate independently, CP and KCS officials said.

Headquartered in Calgary, Alberta, Canada, CPKC will be the first railroad connecting North America. While remaining the smallest of the six U.S. Class Is by revenue, the combined company will have a much larger and more competitive network, operating approximately 20,000 miles of rail and employing close to 20,000 people. Full integration of CP and KCS is expected to happen over the next three years, CP and KCS officials said.

CPKC is planning capital investments in new infrastructure of more than $275 million over the next three years to improve rail safety and capacity of the core north-south CPKC main line between Louisiana and the upper Midwest, they said.

CPKC will bring a "new standard of safety" to railroading in North America, CP and KCS officials said.

"CP has been the safest railroad in North America for 17 straight years as measured by the Federal Railroad Administration train accident frequency ratio," company officials said. "In 2022, CP had an all-time best frequency of 0.93, a rate nearly half what the company produced a decade ago and 69% lower than the Class I average."



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