KCS abandons its agreement to be acquired by Canadian Pacific

Kansas City Southern has abandoned its agreement to be acquired by Canadian Pacific, choosing instead a competing bid from Canadian National Railway with a bigger price tag, but also greater regulatory risks.

The decision Friday comes one day after Canadian Pacific said that it would stick with its initial $25 billion buyout agreement made in March, even after Kansas City Southern said that a richer $33.6 billion bid from Canadian National appeared to be superior.

Sensing that a deal was imminent Friday, Canadian Pacific made public a letter to regulators that it intended to proceed with its application for its approval to control Kansas City Southern based on its agreement from March.