CALGARY,
AB and JACKSONVILLE,
Fla., June 28, 2023 /PRNewswire/ - Canadian
Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC), CSX Corporation
(NASDAQ: CSX) (CSX) and Genesee & Wyoming Inc. (G&W) today
announced they have reached agreements that when completed will
create a new direct CPKC-CSX interchange connection in Alabama.
As part of the series of proposed transactions, CPKC and CSX
would each acquire or operate portions of Meridian & Bigbee
Railroad, L.L.C. (MNBR), a G&W-owned railway in Mississippi and Alabama, to establish a new freight corridor
for shippers that connects Mexico,
Texas and the U.S. Southeast.
"This strategic acquisition will bring more shipping options to
intermodal, automotive and other customers by providing a new,
efficient corridor connecting expanding markets in Mexico, Texas
and the U.S. Southeast," said Keith
Creel, CPKC President and Chief Executive Officer. "With
this new east-west connection taking advantage of each railway's
routes and service, we can extend our reach converting more freight
traffic to rail and off our highways."
"CSX is excited to establish this new interchange connection
with CPKC which provides shippers with a compelling transportation
option with access to markets in Texas and Mexico as well as into the heart of the
thriving and dynamic U.S. Southeast," said Joe Hinrichs, President and Chief Executive
Officer of CSX. "This new service is a demonstration of our
commitment to creating product offerings for shippers that help
them leverage the efficiency and sustainability advantages of rail
to drive growth."
"We are pleased to have entered into agreements with CSX and
CPKC that will enable MNBR to continue providing customers with
outstanding short line service from Linden, Alabama, to Meridian, Mississippi, while enabling our
Class I partners to create a new connection into the Southeast
U.S.," said Jack Hellmann, G&W
CEO. "At the same time, we have enhanced several agreements related
to other G&W short line railroads and are collaborating on the
expansion of our service to Alberta and the Alberta Industrial Heartland
in conjunction with CPKC."
The MNBR runs between Meridian,
Miss. and Montgomery, Ala.,
and currently is operated under a combination of ownership and
operating agreements.
Under the agreements announced today, CPKC would acquire and
operate the segment of the MNBR between Meridian and Myrtlewood, Ala. and CSX would operate the
lines currently leased by MNBR east of Myrtlewood. As a result, CPKC and CSX would
establish a direct CPKC-CSX interchange at or near Myrtlewood, Ala. In exchange, G&W would
acquire certain Canadian properties owned by CPKC and other rights.
MNBR would receive rights to continue to provide local service to
existing customers on former MNBR-owned lines and connect with
other railroads without interchange restrictions.
Terms of the transactions were not disclosed and will be
addressed in definitive agreements that the parties have agreed to
negotiate. Certain portions of the transactions are subject to
regulatory review and approval from, or exemption by, the U.S.
Surface Transportation Board.
Forward looking
information
This news release contains certain forward-looking information
and forward-looking statements (collectively, "forward-looking
information") within the meaning of applicable securities laws in
both the U.S. and Canada.
Forward-looking information includes, but is not limited to,
statements concerning the parties' expectations, beliefs, plans,
goals, objectives, assumptions and statements about possible future
events, conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as "financial expectations", "key assumptions",
"will", "anticipate", "believe", "expect", "plan", "should",
"commit", "outlook", "guidance" or similar words suggesting future
outcomes.
This news release contains forward-looking information relating,
but not limited, to agreements between CPKC and CSX, between CPKC
and G&W and between G&W and CSX to create a new direct
interchange connection in Alabama,
the anticipated impact of the agreements on available shipping
options for customers, the effects of the agreements on access to
markets in Texas, Mexico and the southeast U.S., the negotiation
of definitive agreements among the parties, plans and expectations
regarding the integration of a CPKC-CSX interchange, and other
related matters associated with the changes in ownership and/or
control, and operation of segments of the MNBR and assumptions
underlying or relating to any of the foregoing.
The forward-looking information contained in this news release
is based on the parties' current expectations, estimates,
projections and assumptions, having regard to the parties'
experience and the parties' perception of historical trends, and
includes, but is not limited to, expectations, estimates,
projections and assumptions relating to: changes in business
strategies; the fuel efficiency of railways and the parties'
operations; the impacts of existing and planned capital
investments; North American and global economic growth; commodity
demand growth; sustainable industrial and agricultural production;
commodity prices and interest rates; performance of the parties'
assets and equipment; sufficiency of the parties' budgeted capital
expenditures in carrying out the parties' business plans;
geopolitical conditions; applicable laws, regulations and
government policies; the availability and cost of labour services
and infrastructure; the satisfaction by third parties of their
obligations to the parties; carbon markets, evolving sustainability
strategies, and scientific or technological developments; and
capital investments by third parties. Although the parties believe
the expectations, estimates, projections and assumptions reflected
in the forward-looking information presented herein are reasonable
as of the date hereof, there can be no assurance that they will
prove to be correct. Current conditions, economic and otherwise,
render assumptions, although reasonable when made, subject to
greater uncertainty.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from those
expressed or implied by forward-looking information. By its nature,
CPKC's forward-looking information involves inherent risks and
uncertainties that could cause actual results to differ materially
from the forward looking information, including, but not limited
to, the following factors: changes in business strategies and
strategic opportunities; general Canadian, U.S., Mexican and global
social, economic, political, credit and business conditions; risks
associated with agricultural production such as weather conditions
and insect populations; the availability and price of energy
commodities; the effects of competition and pricing pressures,
including competition from other rail carriers, trucking companies
and maritime shippers in Canada,
the U.S. and Mexico; North
American and global economic growth and conditions; industry
capacity; shifts in market demand; changes in commodity prices and
commodity demand; uncertainty surrounding timing and volumes of
commodities being shipped via CPKC; inflation; geopolitical
instability; changes in laws, regulations and government policies,
including regulation of rates; changes in taxes and tax rates;
potential increases in maintenance and operating costs; changes in
fuel prices; disruption in fuel supplies; uncertainties of
investigations, proceedings or other types of claims and
litigation; compliance with environmental regulations; labour
disputes; changes in labour costs and labour difficulties; risks
and liabilities arising from derailments; transportation of
dangerous goods; timing of completion of capital and maintenance
projects; sufficiency of budgeted capital expenditures in carrying
out business plans; services and infrastructure; the satisfaction
by third parties of their obligations; currency and interest rate
fluctuations; exchange rates; effects of changes in market
conditions and discount rates on the financial position of pension
plans and investments; trade restrictions or other changes to
international trade arrangements; the effects of current and future
multinational trade agreements on the level of trade among
Canada, the U.S. and Mexico; climate change and the market and
regulatory responses to climate change; anticipated in-service
dates; success of hedging activities; operational performance and
reliability; customer and other stakeholder approvals and support;
regulatory and legislative decisions and actions; the adverse
impact of any termination or revocation by the Mexican government
of Kansas City Southern de México, S.A. de C.V.'s Concession;
public opinion; various events that could disrupt operations,
including severe weather, such as droughts, floods, avalanches and
earthquakes, and cybersecurity attacks, as well as security threats
and governmental response to them, and technological changes; acts
of terrorism, war or other acts of violence or crime or risk of
such activities; insurance coverage limitations; material adverse
changes in economic and industry conditions, including the
availability of short and long-term financing; the pandemic created
by the outbreak of COVID-19 and its variants and resulting effects
on economic conditions, the demand environment for logistics
requirements and energy prices, restrictions imposed by public
health authorities or governments, fiscal and monetary policy
responses by governments and financial institutions, and
disruptions to global supply chains; the realization of anticipated
benefits and synergies of the Canadian Pacific Railway Limited (CP)
- Kansas City Southern (KCS) transaction and the timing thereof;
the satisfaction of the conditions imposed by the U.S. Surface
Transportation Board in its March 15,
2023 final decision; the success of integration plans for
KCS; the focus of management time and attention on the CP-KCS
transaction and other disruptions arising from the CP-KCS
integration; estimated future dividends; financial strength and
flexibility; debt and equity market conditions, including the
ability to access capital markets on favourable terms or at all;
cost of debt and equity capital; improvement in data collection and
measuring systems; industry-driven changes to methodologies; and
the ability of the management of CPKC to execute key priorities,
including those in connection with the CP-KCS transaction. The
foregoing list of factors is not exhaustive. These and other
factors are detailed from time to time in reports filed by CPKC
with securities regulators in Canada and the
United States. Reference should be made to "Item 1A - Risk
Factors" and "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Forward-Looking
Statements" in CPKC's annual and interim reports on Form 10-K and
10-Q.
About CPKC
With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line
transnational railway linking Canada, the United
States and México, with unrivaled access to major ports from
Vancouver to Atlantic Canada to the Gulf of México to
Lázaro Cárdenas, México. Stretching approximately 20,000 route
miles and employing 20,000 railroaders, CPKC provides North
American customers unparalleled rail service and network reach to
key markets across the continent. CPKC is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise. Visit cpkcr.com to
learn more about the rail advantages of CPKC. CP-IR
About CSX
CSX, based in Jacksonville,
Florida, is a premier transportation company. It provides
rail, intermodal and rail-to-truck transload services and solutions
to customers across a broad array of markets, including energy,
industrial, construction, agricultural and consumer products. For
nearly 200 years, CSX has played a critical role in the nation's
economic expansion and industrial development. Its network connects
every major metropolitan area in the eastern United States, where nearly two-thirds of the
nation's population resides. It also links more than 230 short-line
railroads and more than 70 ocean, river and lake ports with major
population centers and farming towns alike. More information about
CSX Corp. and its subsidiaries is available
at www.csx.com.
About Genesee & Wyoming
G&W owns or leases 115 freight railroads with 7,300
employees serving 3,000 customers. The company's North American
operations include 110 short line and regional railroads that serve
43 U.S. states and four Canadian provinces over more than 13,000
track-miles. G&W subsidiaries and joint ventures also provide
rail service at more than 30 major ports, rail-ferry service
between the U.S. Southeast and Mexico, transload services, and industrial
railcar switching and repair. G&W is owned by Brookfield
Infrastructure Partners, L.P. and GIC.
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SOURCE CPKC