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CP railroad's $31B purchase of Kansas City Southern advances

The railroad merger that was nearly derailed by a bidding war earlier this year is moving forward although regulators will have the final say next year on Canadian Pacific’s $31 billion acquisition of Kansas City Southern railroad.

Canadian Pacific set up a voting trust that purchased Kansas City Southern Tuesday after shareholders of both railroads overwhelmingly approved the deal last week.

The U.S. Surface Transportation Board will spend the next year reviewing the deal before deciding whether to give it final approval.

Even with the merger expenses Canadian Pacific said it still expects its profits to grow this year by a rate in the high single digits.