First major US railroad merger in 2 decades will go forward

The first major railroad merger in more than two decades, one that would link the United States, Canada and Mexico, was approved by federal regulators Wednesday.

Canadian Pacific’s $31 billion acquisition of Kansas City Southern will combine the two smallest of the nations seven major railroads after an arduous two-year review from the U.S. Surface Transportation Board.

The bar for railroad mergers in the U.S. was raised substantially at the start of the century after a disastrous combination of Union Pacific and Southern Pacific in 1996 that snarled rail traffic for an extended period, followed by the 1999 split of Conrail between Norfolk Southern and CSX, which created backups in the East.

Railroads and safety have become a national political fight this year following a fiery derailment that forced evacuations in Ohio last month, and the safety track record of both Canadian Pacific and Kansas City Southern were poured over throughout the extended review process.