CN (TSX: CNR, NYSE: CNI) and Kansas City Southern (NYSE: KSU)
(“KCS”) today announced that KCS has scheduled a virtual Special
Meeting of Stockholders (“Special Meeting”) to vote on the proposed
combination with CN on August 19, 2021, at 9:00 a.m. Central Time.
All stockholders of record of KCS common stock and KCS 4%
non-cumulative preferred stock as of the close of business on July
1, 2021 will be entitled to vote their shares at the Special
Meeting.
As previously announced on May 21, 2021, under the terms of the
agreement, which was unanimously approved by the Board of Directors
of each company, KCS stockholders will receive $200 in cash and
1.129 shares of CN common stock for each KCS common share, with KCS
stockholders expected to own approximately 12.65% of the combined
company. KCS’ preferred stockholders will receive $37.50 in cash
for each preferred share. Additional information regarding the
combination can be found in the definitive proxy statement that has
been filed with the U.S. Securities and Exchange Commission
(“SEC”).
“We are thrilled to be taking this important next step and
giving KCS stockholders the opportunity to vote on the creation of
the premier railway for the 21st century. Numerous stakeholders of
both companies have voiced overwhelming support for this compelling
combination, and we look forward to delivering the many benefits of
this pro-competitive transaction to them. This combination delivers
significant value to KCS stockholders along with the opportunity to
participate in the significant upside of the combined company.”
- JJ Ruest, president and chief executive officer of CN
“The filing of the definitive proxy statement represents an
important milestone as we work toward completing this transaction.
By joining with CN, KCS will provide our customers access to new
single-line transportation services at the best value for their
transportation dollar, while increasing competition among the Class
1 railroads. Together, CN and KCS will be positioned to deliver on
the transaction’s powerful potential to create new growth
opportunities for our customers, employees, labor partners,
communities and stockholders.”
- Patrick J. Ottensmeyer, president and chief executive officer
of KCS
The KCS Board of Directors unanimously recommends that
stockholders vote “FOR” the merger agreement with CN and the other
proposals outlined in the definitive proxy statement. CN will
acquire KCS shares and place them into a voting trust if such trust
is approved by the Surface Transportation Board (“STB”). KCS
stockholders will receive the merger consideration immediately upon
the closing into CN’s voting trust, which is expected to be in the
second half of 2021. Following this step, the STB and other
regulatory authorities will complete their review of CN’s control
of KCS. Upon approval, the completion of the transaction to take
the KCS shares out of the voting trust is expected to take place in
the second half of 2022.
CN’s voting trust is an integral component of the CN-KCS
combination. It prevents premature control of KCS, allows KCS to
maintain independence and protects KCS’ financial health during the
STB’s review of the ultimate combination of CN and KCS. CN and KCS
are confident that the voting trust meets all the standards set
forth by the STB and believe that, after a fair and thorough review
by the STB, it should be approved.
CN’s prospectus and KCS’ definitive proxy materials can be found
on the SEC’s website at www.sec.gov. The proxy materials are being
mailed to all stockholders eligible to vote at the Special Meeting,
which can be accessed at meetings.computershare.com/MUKQC2H.
KCS stockholders who need assistance or have questions regarding
the KCS Special Meeting may contact KCS’s proxy solicitor:
If you have any questions,
require assistance with voting your proxy card,
or need additional copies of
proxy material, please call MacKenzie Partners
at the phone numbers listed
below.
MacKenzie Partners,
Inc.
1407 Broadway, 27th Floor
New York, NY 10018
email:
KSU@mackenziepartners.com
(212) 929-5500 or (800)
322-2885
For more information on CN’s combination with KCS, please visit
www.ConnectedContinent.com.
About CN
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. CN is committed to programs supporting social responsibility
and environmental stewardship.
About Kansas City Southern
Headquartered in Kansas City, Mo., Kansas City Southern (KCS)
(NYSE: KSU) 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.
More information about KCS can be found at www.kcsouthern.com
Forward Looking Statements
Certain statements included in this news release constitute
“forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and under
Canadian securities laws, including statements based on
management’s assessment and assumptions and publicly available
information with respect to KCS, regarding the proposed transaction
between CN and KCS, the expected benefits of the proposed
transaction and future opportunities for the combined company. By
their nature, forward-looking statements involve risks,
uncertainties and assumptions. CN and KCS caution that their
assumptions may not materialize and that current economic
conditions render such assumptions, although reasonable at the time
they were made, subject to greater uncertainty. Forward-looking
statements may be identified by the use of terminology such as
“believes,” “expects,” “anticipates,” “assumes,” “outlook,”
“plans,” “targets,” or other similar words.
Forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and other factors
which may cause actual results, performance or achievements of CN,
or the combined company, to be materially different from the
outlook or any future results, performance or achievements implied
by such statements. Accordingly, readers are advised not to place
undue reliance on forward-looking statements. Important risk
factors that could affect the forward-looking statements in this
news release include, but are not limited to: the outcome of the
proposed transaction between CN and KCS; the parties’ ability to
consummate the proposed transaction; the conditions to the
completion of the proposed transaction; that the regulatory
approvals required for the proposed transaction may not be obtained
on the terms expected or on the anticipated schedule or at all;
CN’s indebtedness, including the substantial indebtedness CN
expects to incur and assume in connection with the proposed
transaction and the need to generate sufficient cash flows to
service and repay such debt; CN’s ability to meet expectations
regarding the timing, completion and accounting and tax treatments
of the proposed transaction; the possibility that CN may be unable
to achieve expected synergies and operating efficiencies within the
expected time-frames or at all and to successfully integrate KCS’
operations with those of CN; that such integration may be more
difficult, time-consuming or costly than expected; that operating
costs, customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers or suppliers) may be greater than expected
following the proposed transaction or the public announcement of
the proposed transaction; the retention of certain key employees of
KCS may be difficult; the duration and effects of the COVID-19
pandemic, general economic and business conditions, particularly in
the context of the COVID-19 pandemic; industry competition;
inflation, currency and interest rate fluctuations; changes in fuel
prices; legislative and/or regulatory developments; compliance with
environmental laws and regulations; actions by regulators; the
adverse impact of any termination or revocation by the Mexican
government of KCS de México, S.A. de C.V.’s Concession; increases
in maintenance and operating costs; security threats; reliance on
technology and related cybersecurity risk; trade restrictions or
other changes to international trade arrangements; transportation
of hazardous materials; various events which could disrupt
operations, including illegal blockades of rail networks, and
natural events such as severe weather, droughts, fires, floods and
earthquakes; climate change; labor negotiations and disruptions;
environmental claims; uncertainties of investigations, proceedings
or other types of claims and litigation; risks and liabilities
arising from derailments; timing and completion of capital
programs; and other risks detailed from time to time in reports
filed by CN with securities regulators in Canada and the United
States. Reference should also be made to Management’s Discussion
and Analysis in CN’s annual and interim reports, Annual Information
Form and Form 40-F, filed with Canadian and U.S. securities
regulators and available on CN’s website, for a description of
major risk factors relating to CN. Additional risks that may affect
KCS’ results of operations appear in Part I, Item 1A “Risks Related
to KCS’ Operations and Business” of KCS’ Annual Report on Form 10-K
for the year ended December 31, 2020, and in KCS’ other filings
with the U.S. Securities and Exchange Commission (“SEC”).
Forward-looking statements reflect information as of the date on
which they are made. CN and KCS assume no obligation to update or
revise forward-looking statements to reflect future events, changes
in circumstances, or changes in beliefs, unless required by
applicable securities laws. In the event CN or KCS does update any
forward-looking statement, no inference should be made that CN or
KCS will make additional updates with respect to that statement,
related matters, or any other forward-looking statement.
No Offer or Solicitation
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to Find It
In connection with the proposed transaction, CN has filed with
the SEC a registration statement on Form F-4 to register the shares
to be issued in connection with the proposed transaction, and the
registration statement has been declared effective. CN has filed
with the SEC its prospectus and KCS has filed with the SEC its
definitive proxy statement in connection with the proposed
transaction, and the KCS proxy statement is being sent to the
stockholders of KCS seeking their approval of the merger-related
proposals. This news release is not a substitute for the
registration statement, the prospectus, the proxy statement or
other documents CN and/or KCS may file with the SEC or applicable
securities regulators in Canada in connection with the proposed
transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, THE PROSPECTUS, THE PROXY STATEMENT AND ANY
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC OR APPLICABLE
SECURITIES REGULATORS IN CANADA CAREFULLY IN THEIR ENTIRETY IF AND
WHEN THEY BECOME AVAILABLE (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) BECAUSE THEY CONTAIN AND WILL CONTAIN
IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents
(if and when available) and other documents filed with the SEC and
applicable securities regulators in Canada by CN free of charge
through at www.sec.gov and www.sedar.com. Copies of the documents
filed by CN (if and when available) will also be made available
free of charge by accessing CN’s website at www.CN.ca. Copies of
the documents filed by KCS (if and when available) will also be
made available free of charge at www.investors.kcsouthern.com, upon
written request delivered to KCS at 427 West 12th Street, Kansas
City, Missouri 64105, Attention: Corporate Secretary, or by calling
KCS’ Corporate Secretary’s Office by telephone at 1-888-800-3690 or
by email at corpsec@kcsouthern.com.
Participants
This news release is neither a solicitation of a proxy nor a
substitute for the registration statement, the prospectus, the
proxy statement or other filings that may be made with the SEC and
applicable securities regulators in Canada. Nonetheless, CN, KCS,
and certain of their directors and executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information about CN’s executive officers and
directors is available in its 2021 Management Information Circular,
dated March 9, 2021, as well as its 2020 Annual Report on Form 40-F
filed with the SEC on February 1, 2021, in each case available on
its website at www.CN.ca/investors/ and at www.sec.gov and
www.sedar.com. Information about KCS’ directors and executive
officers may be found on its website at www.kcsouthern.com and in
its 2020 Annual Report on Form 10-K filed with the SEC on January
29, 2021, available at www.investors.kcsouthern.com and
www.sec.gov. Additional information regarding the interests of such
potential participants is or may be included in the registration
statement, the prospectus, the proxy statement or other documents
filed with the SEC and applicable securities regulators in Canada
if and when they become available. These documents (if and when
available) may be obtained free of charge from the SEC’s website at
www.sec.gov and from www.sedar.com, as applicable.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210708005450/en/
Media: CN Canada
Mathieu Gaudreault CN Media Relations & Public Affairs (514)
249-4735 Mathieu.Gaudreault@cn.ca
Longview Communications & Public Affairs Martin Cej (403)
512-5730 mcej@longviewcomms.ca
United States Brunswick Group Jonathan Doorley / Rebecca
Kral (917) 459-0419 / (917) 818-9002 jdoorley@brunswickgroup.com
rkral@brunswickgroup.com
Media: KCS C. Doniele
Carlson KCS Corporate Communications & Community Affairs (816)
983-1372 dcarlson@kcsouthern.com
Joele Frank, Wilkinson Brimmer Katcher Tim Lynch / Ed Trissel
(212) 355-4449
Investment Community: CN
Paul Butcher Vice-President Investor Relations (514) 399-0052
investor.relations@cn.ca
Investment Community: KCS
Ashley Thorne Vice President Investor Relations (816) 983-1530
athorne@kcsouthern.com
MacKenzie Partners, Inc. Dan Burch / Laurie Connell (212)
929-5748 / (212) 378-7071 dburch@mackenziepartners.com
lconnell@mackenziepartners.com
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