Business, Freight News, Rail

CN bids for Kansas City Southern: CP has done same

[ April 27, 2021   //   ]

In what appears to be a bidding war, CN Rail recently announced that it is engaging with the board of directors of Kansas City Southern to complete confirmatory due diligence and finalize a definitive merger agreement to combine the companies and create the premier railway for the 21st century.
Canadian Pacific Railway Limited is already making a bid for the railway.
According to a press statement from CN, CN’s proposal offers a “clear path to completion and is structured in a way that gives KCS shareholders both greater immediate value and the opportunity to participate in the future upside of the combined company, and CN’s plan to use a voting trust means that KCS shareholders will receive compensation upon the closing of the voting trust.”
“We are pleased that KCS has acknowledged the value that a CN-KCS combination would bring as the premier railway for the 21st century,” said JJ Ruest, president and CEO of CN. “Together, CN and KCS will connect North America in a safer, faster, cleaner and stronger way for the benefit of both companies’ stakeholders. CN looks forward to completing its confirmatory diligence and finalizing its merger agreement with KCS promptly.”
Robert Pace, Chair of the Board of CN notes that CN has operated in the United States for more than 100 years. “We pioneered Precision Scheduled Railroading and we were the first railway to articulate and invest in a North American vision,” he said. “CN’s proposal is the right next step for CN, KCS and North America, and this is the right combination to bring the renegotiated USMCA to life in a meaningful way. We have extensive operating experience, including in successfully integrating acquired businesses, and a strong track record of realizing synergies in prior transactions. With KCS’ talented team, we will be able to continue that success in a combination of CN and KCS. We are confident that CN is the better proposal, better partner, the better railway and the best solution for KCS and the North American economy.”

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