Kansas City Southern, the smallest of the major North American railroads, will be added to the Standard & Poor’s 500 Index, replacing Dean Foods Co. as it spins off its WhiteWave Foods Co. unit.
Shares of Kansas City Southern, based in Kansas City, Missouri, rallied 1.6 percent to $118.01 in extended trading at 5:33 p.m. New York time, adding to its 2013 gain of 39 percent. The stock will join the benchmark gauge of U.S. equity after the close of trading on May 23, S&P Dow Jones said today. Dean Foods said May 1 that WhiteWave’s shares will be offered this month.
The revision in the benchmark equity index will prompt money managers to shift holdings to match the index. More than $4.8 trillion is benchmarked to the S&P 500, according to the S&P/DJ website. With a market value of about $12.8 billion, Kansas City Southern will be the 286th largest company in the index, according to data compiled by Bloomberg. The company transports goods from the Mexican port of Lazaro Cardenas to Laredo, Texas, on a line purchased from the Mexican government.
Dean Foods will replace Kansas City Southern in the S&P MidCap 400 Index, while WhiteWave Foods will take Quicksilver Resources Inc.’s spot in that index.