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CP says it will expand its current network by approximately 2500 miles and increase its access to US Midwest markets – including coal.
The deal is structured in a way that will see CP pay more to DM&E if it goes ahead with expansion plans into the Powder River Basin, the largest and fastest-growing source of low-cost, low-sulfur coal in the US.
DM&E had previously received approval to expand into the basin, but was unsuccessful in obtaining a $2.3 billion federal loan to help fund the $6 billion project.
“Canadian Pacific is excited about the prospect for growth in the coal-rich Powder River Basin," said CP president and chief executive Fred Green.
“The DM&E’s favourable geographic position provides a unique ability to create an efficient and competitive additional link to midwestern and eastern utilities."
