The board of directors for Kansas City Southern decided to terminate its merger agreement with Canadian Pacific Railway in March for a more lucrative deal with Canadian National Railway.
Canadian National is offering $33.6 billion, compared to CP’s $25 billion proposal, according to KCS. CN submitted a revised acquisition proposal to KCS Thursday. All three are Class I railroads, but CN is larger than either CP or KCS.
CN President and CEO JJ Ruest said he is delighted that KCS has deemed CN’s binding proposal superior.
“Together, CN and KCS will seamlessly connect ports and rails in the United States, Mexico and Canada by providing superior service, enhanced competition and new market access to move goods across North America safely and efficiently,” Ruest said.
Both companies have been battling to acquire KCS since late March because of its rail lines extending into Mexico.Interested in more news on farm programs, trade and rural issues? Sign up for a four-week free trial to Agri-Pulse. You’ll receive our content - absolutely free - during the trial period.
CP has the right to negotiate amendments for five business days. KCS stockholders and the Surface Transportation Board must still approve the transaction.
CN said the deal with KCS would create “an express route that connects the U.S., Mexico and Canada with a seamless single-owner, single-operator service, and preserve access to all existing gateways to enhance route choices and ensure robust price competition."
On Wednesday, CN announced over 1,000 letters of support for the merger.