- CN (CNR) is seeking authority to combine with Kansas City Southern
- The company submitted a prefiling notification of its intent to file an application
- The transaction would be subject to Kansas City Southern Board accepting CN’s superior proposal of US$325 per share
- Once combined, CN and Kansas City Southern would be fifth among Class 1 railroads
- Shares of CN are up 0.83 per cent on the day, trading at C$140.00 at 11:22 am ET
CN (CNR) is seeking authority to combine with Kansas City Southern.
The company submitted a prefiling notification with the Surface Transportation Board (STB) of its intent to file an application.
Among other things, the transaction would be subject to Kansas City Southern Board accepting CN’s superior proposal of $325 per share.
CN says the company is confident "its proposed combination with Kansas City Southern would enhance competition and be in the public interest."
The Kansas City Southern rail network includes about 10,800 kilometres of track in the U.S. and Mexico.
Kansas City Southern also owns half of Panama Canal Railway Company which operates the Panama Canal Railway.
Once combined, CN and Kansas City Southern would be fifth among Class 1 railroads, as measured by U.S. revenue and track miles. CN has a demonstrated track record in merging other railroads into a seamless network and is committed to keeping existing gateways open. The rail and logistics network would also reduce traffic congestion and prevent thousands of tons of greenhouse gas emissions from entering the atmosphere every day.
"Our proposal to KCS is simple. We are providing greater and more certain value, and a clear path to closing. We have a better bid. We are a better railroad. We will be a better partner for KCS and the communities it serves. And we believe the STB and our customers will recognize that CN presents the best solution for the continued growth, development and prosperity of the North American economy. CN has made a superior proposal and is committed to satisfying the current STB merger rules. CN is confident that the STB will approve the voting trust, which will permit KCS shareholders to crystallize the value of its US and Mexico franchise, and then permit the STB to undertake the careful review process it should take following the closing into the voting trust," said CN CEO Jean-Jacques Ruest.
Shares of CN are up 0.83 per cent on the day, trading at C$140.00 at 11:22 am ET.