KANSAS CITY, Mo. – A new Kansas City Southern deal creates the first railroad to link the United States, Mexico and Canada.

Canadian Pacific Railway Ltd. has agreed to buy Kansas City Southern for $25 billion in cash and stock. The deal values Kansas City Southern at $275 a share, based on Friday’s stock prices.  Kansas City Southern shares closed at $224 Friday on the New York Stock Exchange.

The acquisition would need the approval of a U.S. regulator, the Surface Transportation Board.  Analysts say this deal has a better chance of success than past failed ones because there is little overlap between the two railroads.

Morningstar analyst Matthew Young said he doesn’t think the proposed deal will hurt competition overall because the railroads don’t compete directly now.

The cash and stock deal announced Sunday is also set to capitalize on growing trade across North America by creating the first railroad that would link the United States, Mexico and Canada.

The companies say they expect the process to take until mid-2022. The combined company would operate about 20,000 miles of railway, employ 20,000 people and generate annual revenue of about $8.7 billion.

You can find more information from Canadian Pacific Railway here.