Canadian Pacific to acquire Kansas City Southern in $25 billion railroad merger that spans across the entire North American continent

railroad train
  • Canadian Pacific Railway has agreed to acquire Kansas City Southern for $25 billion.
  • The merger will create the first-ever rail network that spans across Canada, the United States, and Mexico.
  • Shareholders of Kansas City Southern are set to receive $90 in cash and 0.489 shares of Canadian Pacific Railway.
  • See more stories on Insider’s business page.

Canadian Pacific Railway has agreed to acquire Kansas City Southern in a deal that will create the first ever rail network that spans across Canada, the United States, and Mexico.

The combined company will operate 20,000 miles of rail, employ close to 20,000 people, and generate total revenues of about $8.7 billion, according to a statement.

The deal values Kansas City Southern at $275 per share, representing a 23% premium from Friday’s closing price of $224.16. The deal assigns Kansas City Southern an enterprise value of $29 billion, and a $25 billion valuation less outstanding debt.

Shareholders of Kansas City Southern will receive 0.489 shares of Canadian Pacific and $90 in cash for each share held of KCS.

“The new competition we will inject into the North American transportation market cannot happen soon enough, as the new USMCA Trade Agreement among these three countries makes the efficient integration of the continent’s supply chains more important than ever before,” Canadian Pacific CEO Keith Creel said in a statement on the merger.

Creel will serve as CEO of the combined company, which will be headquartered in Calgary, Canada, according to the statement.

The deal has been approved by the boards of both companies, and awaits approval from the US Surface Transportation Board.

The proposed deal would represent the largest merger so far in 2021. Canadian Pacific plans to issue 44.5 million in new shares and raise about $8.6 billion in debt to fund the transaction.

Read the original article on Business Insider

Pandion Therapeutics soars 132% after Merck agrees to buy the biotech for $1.85 billion

Kenneth C. Frazier
Merck & Co. CEO Kenneth C. Frazier

  • Pandion Therapeutics soared 132% on Thursday after Merck agreed to acquire the biotech firm for $1.85 billion.
  • Merck will initiate a tender offer through a subsidiary to acquire all outstanding shares of Pandion for $60 per share.
  • Pandion develops therapeutics targeting patients living with autoimmune diseases.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Merck sparked a 132% surge in Pandion Therapeutics on Thursday after the pharmaceutical giant agreed to acquire the biotech firm for $1.85 billion.

Pandion is a clinical-stage biotechnology company that is developing therapeutics for patients living with autoimmune diseases. Pandion’s lead candidate, PT101, completed a Phase 1a trial earlier this year and is a potential treatment for ulcerative colitis.

Merck will initiate a tender offer through a subsidiary to acquire all outstanding shares of Pandion for $60 per share. Shares of Pandion closed at $25.63 on Wednesday. The completion of the acquisition will require at least a majority of Pandion shareholders tendering their shares to Merck. 

“Pandion has applied its TALON technology to develop a robust pipeline of candidates designed to re-balance the immune response with potential applications across a wide array of autoimmune diseases,” said Dr. Dean Y. Li, president of Merck Research Laboratories. 

The transaction is expected to close in the first half of 2021. 

Read the original article on Business Insider

People’s United jumps 10% after M&T agrees to buy the regional bank for $7.6 billion

Trader NYSE green
  • People’s United Financial surged 10% on Monday after M&T Bank agreed to acquire the regional bank for $7.6 billion.
  • The proposed merger will be funded with stock, with M&T issuing 0.118 shares for each People’s United share. 
  • The combined bank will have $200 billion in assets, with locations in 12 states on the East coast.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

People’s United Financial surged as much as 10% on Monday after M&T Bank agreed to acquire the regional bank in a deal worth $7.6 billion.

M&T will fund the entire deal with stock, issuing 0.118 shares for each People’s United share. The deal represents a 13% premium to Friday’s closing price of People’s United Financial.

The combined regional bank will have locations in 12 states throughout the Northeast and Mid-Atlantic and have approximately $200 billion in assets. 

Upon the completion of the merger, People’s United shareholders will collectively own 28% of the combined company.

“Combining our common legacies and our complementary footprints will strengthen our ability to serve our communities and customers, and provide solutions that make a difference in people’s lives,” M&T CEO René Jones said. 

M&T expects the merger to be immediately accretive to its tangible book value per share, and 10%-12% accretive to its earnings per share in 2023. The combined bank expects to realize $330 million in annual cost synergies. 

The proposed merger has been approved by the board of directors of both companies and is expected to close in the fourth quarter of 2021. 

Shares of M&T traded flat in early Monday trades. 

Read the original article on Business Insider

Office Depot jumps 20% after Staples offers to buy the company for $2.1 billion

office depot
A view of the Office Depot store in Annapolis, Wednesday, March 25, 2020.

  • The parent company of Office Depot surged as much as 20% on Monday after Staples offered to acquire the company for $40 per share, or $2.1 billion.
  • This would be Staples’ third attempt at buying Office Depot in the last 25 years. In 2015, the FTC said Staples’ proposed acquisition of Office Depot for more than $6 billion would violate anti-trust law.
  • Staples went private in 2017 after it sold itself to Sycamore Partners.
  • Visit Business Insider’s homepage for more stories.

The ODP Corporation, parent company of Office Depot, soared as much as 20% on Monday after Staples offered to buy the company for the third time in 25 years.

In a letter sent to the board of directors of ODP, Staples offered $40 per share for Office Depot, or $2.1 billion. Staples last tried to acquire Office Depot for more than $6 billion, but the proposed merger was declined by the FTC due to anti-trust concerns.

Staples also tried to acquire Office Depot in 1997. The current offer represents a 61% premium over the average trading price of Office Depot over the past 90 days. 

Staples went private in 2017 after selling itself to Sycamore Partners and affiliates of Staples currently own about 5% of outstanding shares of Office Depot. 

“Staples has sufficient resources to finance the transaction, so our obligation to proceed with the transaction is not subject to a financing contingency,” the letter said.

Staples would be prepared to sell some units of Office Depot to unlock value and escape antitrust concerns from US regulators, according to the letter.

And in the event that Office Depot and Staples can not agree on a deal, Staples plans to launch an all-cash tender offer for 100% of ODP stock in March.

In a statement, Office Depot confirmed receipt of the letter from Staples and said it would carefully review “the proposal with its financial and legal advisors to determine the course of action that it believes is in the best interests of the Company and its shareholders.”

Both companies expect a six month regulatory review process if the deal moves forward.

Read more: BANK OF AMERICA: Buy these 10 Dow stocks to take advantage of rich dividends and a long-term strategy primed for a comeback in 2021

odp charts.JPG
Read the original article on Business Insider