Kansas City Southern (company)
Kansas City Southern de Mexico | |
Website | kcsouthern |
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Footnotes / references Financials as of December 31, 2022[update]. References:[1] |
Kansas City Southern (KCS) was a transportation holding company with railroad investments in the United States, Mexico, and Panama that existed from 1887 to 2023. The KCS rail network included about 7,299 miles (11,747 km) of track in the U.S. and Mexico.[2]
Its primary U.S. holding was the
The company also owned half of Panama Canal Railway Company (PCRC), which operates the
Beginning in 2021, KCS became the subject of a bidding war between Canadian National Railway and Canadian Pacific Railway. Canadian Pacific (CP) emerged as the winner. CP then sought a merger, which was approved by the US Surface Transportation Board on March 15, 2023, and the combined "Canadian Pacific Kansas City Limited" was created on April 14, 2023. The combined company forms the only railroad serving all of the countries in the North American trade zone (Canada, Mexico, and the United States).
History
In 1887,
While the Belt Railway was a success, Stilwell had a much bigger dream. Over the ensuing decade, the line grew through construction and acquisition of other roads, such as the
In 1962, KCS reorganized as a holding company, Kansas City Southern Industries, Inc. (KCSI), as it began to diversify its interests into other industries under the CEO William Deramus III. The new KCSI focused primarily on the financial industry, along with the rail industry. In 1969, KCSI started the two largest companies that came out of the diversification: DST Systems and Janus Capital Group, which was known as Stilwell Financial at the time.[10][11] DST Systems is a software development firm that specializes in information processing and management, with the goal of improving efficiency, productivity, and customer service.[12] Janus Capital Group is a finance firm that provides growth and risk-managed investment strategies.[13]
Expansion in the 1990s
The core KCSI rail system changed little until the 1990s, when the purchase of
The 1990s also saw KCSI expand into
Shortly after acquiring the Mexican government's concession, KCSI entered into another joint venture to purchase a government concession. On June 19, 1998, the government of
After these large
In 2002, the Kansas City Southern Industries formally changed its name to Kansas City Southern (KCS) after spinning off many subsidiary businesses that were not directly related to the railroad business (the largest of which were Janus Capital Group and DST Systems).[15] In 2005, Kansas City Southern purchased TMM's share in TFM and TM, giving them full ownership of the companies. TFM was officially renamed Kansas City Southern de México, S.A. de C.V.[15] The Texas Mexican Railway retained its original name and is a subsidiary of KCS.[16]
In June 2009, the Kansas City Southern began operating on new trackage between Victoria and Rosenberg, Texas, known as the Macaroni Line.[17]
Patrick J. Ottensmeyer was named President in April 2015[18] and CEO in June 2016,[19][20] succeeding David Starling.[21][22] Ottensmeyer had served as Executive Vice President of Sales and Marketing and Chief Financial Officer. He was named Railroader of the Year by Railway Age for 2020.[citation needed]
In September 2020, the company rejected takeover offers from Global Infrastructure Partners that ranged up to $23 billion; the final offer valued the company at a 17% premium over its share high in February 2020 despite the COVID-19 pandemic.[23][24]
Merger with Canadian Pacific Railway
In March 2021, Calgary-based Canadian Pacific Railway offered over $25 billion to purchase KCS. The purchase would allow the Canadian company to create the first rail network connecting the United States, Mexico and Canada.[25] However, in May 2021, Canadian National Railway announced a superior bid to CP's, which KCS management later agreed to support.[26] In August 2021, CP announced an increased bid that, while still less than CN's bid, was claimed by CP to have a greater chance of regulatory approval.[27] While KCS's board agreed to CN's bid, shareholder and regulatory approvals were still required; on August 31, the US Surface Transportation Board (STB) denied a voting trust between CN and KCS.[28]
With the decision by the STB, KCS re-engaged with CP on CP's original offer.[29][30] On September 15, KCS confirmed that it had terminated its agreement with CN and would support CP's revised offer.[31] Kansas City Southern's shareholders voted to approve the merger on December 10, 2021.[32] The transaction closed in early 2022, following which KCS was held in a previously-approved voting trust pending approval by the STB; the combined company was to be named Canadian Pacific Kansas City (CPKC).[33][34] The combined "Canadian Pacific Kansas City Limited" would form the first railroad serving all of the countries in the North American trade zone (Canada, Mexico and the United States).[34]
On March 15, 2023, the STB approved the merger between the two companies, which was completed on April 14, 2023.[35][36]
Subsidiaries
In addition to KCS, KCSM and PCRC, Kansas City Southern’s subsidiaries include:
- Gateway Eastern Railway Company (GWWE) is a wholly owned subsidiary of KCS. GWWE provides rail service over about 17 miles (27 km) of track in the East St. Louis, Illinois, area.[5]
- Meridian Speedway, LLC (MSLLC) is a majority-owned, consolidated subsidiary that owns the former KCS rail line between Meridian, Mississippi and Shreveport, Louisiana, which is a portion of the KCS rail route between Dallas and Meridian, and is known as the "Meridian Speedway." Norfolk Southern Corporation (NS), through its wholly owned subsidiary, the Alabama Great Southern Railroad, owns a minority interest in MSLLC.[5]
- Southern Capital, Development, and Industrial Services Companies: The Southern Capital company consists of San Francisco, California, Southern Capital Corporation has the rail assets that once belonged to Carland and KCS, as well as the loan portfolio once owned by Southern Leasing Corporation.[5]
- The Texas Mexican Railway Company (trackage rights that spans from Beaumont, Texas to Robstown, Texas. With its trackage rights and physical railway, the Texas Mexican Railway connects KCSM and KCS at Laredo and Beaumont. TexMex also owns the Texas Mexican Railway International Bridge. It is the only rail bridge that connects the United States with Mexico through Laredo, and 40% of all rail traffic that travels to Mexico crosses over this bridge. Without TexMex, it would be nearly impossible for KCS and KCSM to act as a single company under Kansas City Southern.[5]
- KCS also owns a handful of non-core businesses. These minor subsidiaries, holding companies or minority investments (investments in which KCS has less than 50 percent ownership), have few employees and serve to support the rail operation. These include Canama Transportation, Caymex Transportation, Inc., Rosenberg Regional LLC, Joplin Union Depot, Kansas City Terminal Railway, Port Arthur Bulk Marine Terminal Co. and Veals, Inc.[5]
Company officers
The following is a list of the executives heading KCS since 1889.[37]
- Edward L. Martin (1889–1897)
- Arthur Stilwell (1897–1900)
- Samuel W. "Colonel" Fordyce (1900)
- Stuart R. Knott (1900–1905)
- Job A. Edson (1905–1918)
- Leonor F. Loree (1918–1920)
- Job A. Edson (1920–1927)
- Charles E. Johnston (1928–1938)
- Harvey C. Couch (1939)
- C.P. "Pete" Couch (1939–1941)
- William N. Deramus, Jr.(1941–1961)
- William N. Deramus III (1961–1973)
- Thomas S. Carter (1973–1986)
- William N. Deramus IV (1986–1990)
- Landon H. Rowland (1990–1991)
- George W. Edwards (1991–1995)
- Michael R. Haverty (1995–2010)
- Arthur Shoener (2005-2008)
- David L. Starling (2008–2016)[38]
- Patrick J Ottensmeyer (2015–2023)
See also
References
- ^ "Form 10-K" (PDF). Kansas City Southern Railway. February 3, 2023.
- ^ a b c https://www.kcsouthern.com/pdf/community/kcs-sustainability-data-2021.pdf?language_id=1 [bare URL PDF]
- ^ "Encyclopedia of Arkansas". Encyclopedia of Arkansas.
- ^ Publishing, Value Line. "Value Line - The Most Trusted Name in Investment Research". www.valueline.com. Retrieved 2017-08-03.
- ^ a b c d e f g "Kansas City Southern "Company Profiles"". Archived from the original on 2009-02-19. Retrieved 2019-02-12.
- ^ The China-Kansas Express Archived October 16, 2017, at the Wayback Machine, a June 2006 "Forbes" article
- ^ "Kansas City Southern 2017 Annual Report" (PDF).
- ^ "kcsi.com". www.kcsi.com.
- ^ Group, Karl Bernard & the Rhombus. "SAGA OF KANSAS CITY SOUTHERN LINES". www.kcshs.org. Retrieved 2017-08-03.
- ^ Yahoo! Inc. (July 2008). "Summary of DST Stock". Yahoo! Inc. Archived from the original on October 24, 2007. Retrieved August 1, 2008.
- ^ Yahoo! Inc. (July 2008). "Summary of Janus Capital Grp. Stock". Yahoo! Inc. Archived from the original on August 13, 2008. Retrieved August 1, 2008.
- ^ DST Systems (July 2008). "DST Corporate Website". DST Systems. Archived from the original on June 10, 2008. Retrieved August 1, 2008.
- ^ Janus (July 2008). "Janus Capital Grp. Corporate Website". Janus. Archived from the original on September 29, 2009. Retrieved August 1, 2008.
- ^ Kansas City Southern (July 2008). "Purchases of the KCS Railway". Kansas City Southern Lines. Archived from the original on July 9, 2008. Retrieved July 7, 2008.
- ^ a b Kansas City Southern (July 2008). "History of the Kansas City Southern Railway". Kansas City Southern Lines. Archived from the original on July 9, 2008. Retrieved July 7, 2008.
- ^ Heaster, Randolph (December 6, 2005). "Kansas City Southern railroad has new name". Kansas City Star. Retrieved December 6, 2005.
- ^ "Kansas City Southern to route traffic onto "Macaroni Line" June 17". Retrieved October 26, 2009.
- ^ ""Kansas City Southern names Ottensmeyer as president"". www.bizjournals.com. Retrieved 2017-08-03.
- ^ "KCS Names Patrick J. Ottensmeyer as President and Chief Executive Officer" (Press release). 10 May 2016.
- ^ "BRIEF-Kansas City Southern names Patrick Ottensmeyer as CEO". Reuters. 2016-05-10. Retrieved 2017-08-03.
- ^ Vantuono, William C. (May 11, 2016). "Ottensmeyer succeeds Starling as KCS CEO". Railway Age. Retrieved 2017-08-03.
- ^ "Kansas City Southern chooses Patrick Ottensmeyer to succeed CEO David Starling". kansascity. Retrieved 2017-08-03.
- ^ Gottfried, Cara Lombardo and Miriam (2020-09-09). "Kansas City Southern Rejects $20 Billion Takeover Offer From Investor Group". Wall Street Journal. Retrieved September 15, 2020.
- ^ Sutherland, Brooke (September 14, 2020). "Not Even a $23 Billion Buyout Is Rich Enough for a Railroad Anymore". Bloomberg. Retrieved 2020-09-15.
- ^ "CP Rail Said Near $25 Billion Kansas City Southern Deal". Bloomberg.com. 2021-03-21. Retrieved 2021-03-21.
- ^ "CN to combine with Kansas City Southern". BusinessWire. 2021-05-21.
- ^ Atkins, Eric (August 10, 2021). "Canadian Pacific hikes bid for Kansas City Southern to US$27.2-billion, renewing takeover battle with rival CN". The Globe and Mail. Retrieved August 10, 2021.
- ^ Stephens, Bill (31 August 2021). "Federal regulators reject CN plan to put KCS in voting trust". Trains.
- ^ Stephens, Bill (4 September 2021). "Kansas City Southern moves toward a merger agreement with Canadian Pacific". Trains.
- ^ Vantuono, William C. (4 September 2021). "CP, KCS rekindle relationship". Railway Age.
- ^ Atkins, Eric (September 15, 2021). "Kansas City Southern formally scraps CN takeover agreement, backs rival CP offer". The Globe and Mail. Retrieved September 24, 2021.
- ^ Morris, Frank (2021-12-13). "An iconic railroad is merging with one in Canada — and that could be good news for Kansas City". KCUR 89.3 - NPR in Kansas City. Retrieved 2021-12-14.
- ^ Canadian Pacific (press release) (September 15, 2021). "Canadian Pacific and Kansas City Southern Execute Agreement to Combine, Creating First Single-Line Rail Network Linking U.S.-Mexico-Canada". Retrieved September 24, 2021.
- ^ a b "'Ready to roll': CP Rail preparing for KCS merger, ruling expected within weeks". CBC News. 2023-02-03. Archived from the original on 2023-04-14.
- ^ Franz, Justin (2023-03-15). "LIVE UPDATES: Regulators Approve CP-KCS Merger". Railfan & Railroad Magazine. Retrieved 2023-03-15.
- ^ "Regulators approve Canadian Pacific-Kansas City Southern merger (updated)". Trains. 15 March 2023. Retrieved 2023-03-15.
- ^ KCS Presidents Archived May 12, 2008, at the Wayback Machine from the website of the Kansas City Southern Historical Society
- ^ Davis, Mark (May 11, 2016). "Kansas City Southern chooses Patrick Ottensmeyer to succeed CEO David Starling". Kansas City Business Journal. Retrieved August 17, 2018.
External links
- Kansas City Southern Corporate Website
- Historical business data for Kansas City Southern:
- SEC filings