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Mexican regulators have given their approval to Canadian Pacific Railway Ltd.’s deal to buy U.S. rail system Kansas City Southern, which has more than 10,000 kilometres of track in the U.S. and Mexico.

The railways say the deal has received the go-ahead from the Mexican Federal Economic Competition Commission and the Mexican Federal Telecommunications Institute.

Calgary-based Canadian Pacific has agreed to buy KCS in a deal valued at US$31-billion, including the assumption of US$3.8-billion of debt.

CP and KCS shareholders are scheduled to vote on the proposed transaction on Dec. 8 and 10, 2021, respectively.

Canadian Pacific expects a review of the deal by the U.S. Surface Transportation Board to be complete in the fourth quarter of next year.

The U.S. regulator has already approved the use of a voting trust for the transaction that allows KCS shareholders to receive payment after shareholders of both companies approve the deal but before it receives final approval.

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