The railways say the deal has received the OK from the Mexican Federal Economic Competition Commission and the Mexican Federal Telecommunications Institute.
Calgary-based Canadian Pacific has agreed to buy KCS in a deal valued at US$31 billion, including the assumption of US$3.8 billion of debt.
CP and KCS shareholders are scheduled to vote on the proposed transaction on Dec. 8 and 10, 2021, respectively.
Canadian Pacific expects a review of the deal by the U.S. Surface Transportation Board to be complete in the fourth quarter of next year.
The U.S. regulator has already approved the use of a voting trust for the transaction that allows KCS shareholders to receive payment after shareholders of both companies approve the deal but before it receives final approval.