CN makes superior proposal to combine with Kansas City Southern

April 20, 2021

Torys is representing CN with a team that includes Robert Prichard, Michael Amm, Phil Symmonds, Jared Fontaine and Daniel Masliyah (corporate/M&A).

On April 20, 2021, CN announced that it made a superior proposal to combine with Kansas City Southern (“KCS”) in a cash-and-stock transaction with an total implied enterprise value of US$33.7 billion, or US$325 per share, including the assumption of approximately US$3.8 billion of KCS debt.

The combination would create a premier railway for the 21st century, seamlessly connecting ports and rails in the United States, Mexico and Canada and providing superior service, enhanced competition and new market access to move goods across North America efficiently and safely.

Under the terms of the proposal made to KCS’ Board of Directors, following closing into a voting trust, KCS shareholders would receive US$200 in cash and 1.059 shares of CN common stock for each KCS common share. The cash portion of the consideration would be funded through a combination of cash-on-hand and approximately US$19.3 billion of new debt.

Further information can be found on Globe Newswire’s website.

CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. As the only railroad connecting Canada’s Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919.

KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances with other North American rail partners are primary components of a unique railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.

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