WASHINGTON: The Canadian Pacific Railway plans to merge with US-based Kansas City Southern (KCS) to create the first rail network linking Canada, the United States and Mexico, the companies announced Sunday.

The deal is valued at $29 billion, including the assumption of $3.8 billion in outstanding KCS debt, a joint statement said. “This transaction will be transformative for North America, providing significant positive impacts for our respective employees, customers, communities and shareholders,” said CP president and chief executive Keith Creel.

“This will create the first US-Mexico-Canada railroad.”

The combined network of 20,000 miles (32,000 kilometers) will give Calgary-based CP access to the American heartland via Kansas City, from which a vast rail network reaches from the farms of the US Midwest to the ports of the Gulf of Mexico. The resultant network will also link the ports and factories of Mexico to the ports and energy resources of Canada and the factories of the Northeast US.

Mexico is a major exporter of automobiles, electronics and agricultural products, while also importing large amounts of grain and manufactured goods.

By enlarging market access and providing new transportation options, the joint statement said, the deal is expected to boost North American economic growth.

It said the merger would benefit from the United States-Canada-Mexico Agreement on trade ratified a year ago by the three countries. The USMCA “makes the efficient integration of the continent’s supply chains more important than ever,” Creel said.