The biggest merger of the year so far: we're talking railroads, Biden, and the USMCA

Forget SpaceX shuttles... The hottest transportation story on Wall Street yesterday was a railroad merger. Canadian Pacific Railway has agreed to buy Kansas City Southern in a $25B cash-and-stock deal. It's the biggest merger announcement of the year so far. If approved, it would create the first railroad network connecting the US, Mexico, and Canada.

• ~20K miles: The distance the new company would operate, generating ~$8.7B in sales per year. Start planning your Toronto-Vegas-Cabo trip (if you're a car part or grain product).
• Kansas City Southern shares jumped 11% to a record high yesterday, and have more than doubled in value over the past year.

It's fun to stay at the USMCA... USMCA = US-Mexico-Canada Agreement. Trump signed the major trade treaty into law last year to replace NAFTA. This railroad deal is an effort to capitalize on an anticipated post-pandemic increase in North American trade.

• "Build Back Better": President Biden has pledged to spend trillions on infrastructure (think: roads and bridges). That could benefit railway companies like Kansas City that are transporting gravel, metal, machinery, and other building materials cross-country.
• "Clean energy future:" Another focus of Biden's BBB plan. Rail is 4X more fuel efficient than trucking. One train can keep 300+ trucks off public roads and produce 75% less greenhouse gas emissions.