As it moves ahead towards its vision of becoming the first truly
North American railway, CN (TSX: CNR) (NYSE: CNI) today announced
it has placed an order for 1,000 new generation, high-capacity
grain hopper cars. These innovative new railcars, to be built in a
TrinityRail manufacturing plant in Mexico, will help meet the
growing needs of North American grain farmers and demands of grain
customers.
CN leads the industry in moving grain, and the
TrinityRail order is part of a larger program to build and renew a
fleet of 6,000 hopper railcars over the next three years. CN
recently made a formal offer to acquire Kansas City Southern, a
fellow Class I railway. The combination would extend the span of
CN’s network from Canada and the U.S. into Mexico, making it the
first railroad to link North America’s three national
economies.
“These cars will be manufactured in Mexico and
will help move more grain across the CN rail network, which
continues to make CN the embodiment of a true USMCA railroad. Being
an engine of North American economic growth and prosperity means
that CN focuses continually on making strategic investments. Adding
these 1,000 new generation hopper cars to our fleet is a prime
example of that. In addition to our superior proposal to combine
with KCS, this is a step further in our vision of seamlessly
connecting ports and rails in the United States, Mexico and Canada
and of providing superior service, enhanced competition and new
market access to move goods across North America efficiently and
safely.” – JJ Ruest, President and Chief
Executive Officer, CN
“CN’s grain movement has been resilient during
the pandemic, achieving 14 straight months of record Canadian grain
volume shipments. The dedication of our railroaders as well as our
agri-food and supply chain partners has been key to this
exceptional performance. By purchasing additional hopper cars, we
are strengthening our commitment to grain farmers, grain customers,
and the overall supply chain to support and expand our movement of
grain to international markets as demand continues to
increase.” – Rob Reilly, Executive
Vice-President and Chief Operating Officer, CN
“The purchase of 1,000 new high-capacity hopper
cars by CN is good news for Canadian grain farmers, grain
customers, and the Canadian economy. A safe and reliable freight
rail system is a critical part of a healthy Canadian economy that
supports good middle class jobs.”
– The Honourable Omar Alghabra, Minister of
Transport, Government of Canada.
“As grain farmers know well, we need a reliable
transportation system to get our high-quality products to market in
a timely manner. Today’s great announcement by CN of 1,000 new
high-capacity hopper cars builds on their success of
month-over-month records for grain movement amid record high grain
prices. The Transportation Modernization Act our Government passed
in 2017 also helped incentivize these kinds of investments. All of
it points clearly to an even brighter future on the horizon for
Canadian grain farmers and the entire grain value-chain.”
– The Honourable Marie-Claude Bibeau,
Minister of Agriculture and Agri-Food, Government of Canada
“The employees of Trinity de Mexico are honored
to receive this valuable order from Canadian National. Trinity is a
pioneer in the manufacturing of railcars in Mexico which has
greatly contributed to the development of the Sabinas region, the
state of Coahuila, the entire country of Mexico, and the North
American freight railcar market.”
– Luis Pardo, Executive Vice President, Trinity de
Mexico
“On behalf of Canada’s grain farmers, we are
encouraged by any investment that helps get our grain to markets
across the world. As our production increases, we see this as a
positive sign that our rail capacity is poised to keep up with
growing demand here and abroad.”
– Andre Harpe, Chairman, Grain Growers of
Canada
CN's continued ability to deliver record volumes
of grain shipments is largely due to investments made by the
company over the past few years to improve safety and network
fluidity. The purchase of these lighter, shorter, high capacity
rail cars will enable CN to move more grain, with less equipment,
supporting the company’s focus on better serving customers by
providing safe, efficient, low carbon freight transportation
services. CN is the most fuel-efficient railway in North America,
using 15% less fuel per gross ton mile than the industry average.
In 2020, CN’s actions to reduce emissions, mitigate climate risks
and to develop the low-carbon economy resulted in CN being one of
only three Canadian companies listed on CDP’s prestigious Climate A
List. The partnership with TrinityRail will continue to help CN
maintain its commitment to a cleaner connected continent.
To find out more about CN’s commitment to grain
please visit www.cn.ca/grain.
For more information about CN’s superior
proposal to combine 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.
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 cautions that its 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 any
possible transaction between CN and KCS, including the possibility
that a transaction will not be agreed to or that the terms of any
definitive agreement will be materially different from those
described; uncertainties as to whether KCS will cooperate with CN
regarding the proposed transaction; 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.
Forward-looking statements reflect information
as of the date on which they are made. CN assumes 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 does update
any forward-looking statement, no inference should be made that CN
will make additional updates with respect to that statement,
related matters, or any other forward-looking statement.
No Offer or SolicitationThis
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
ItThis news release relates to a proposal which CN has
made for an acquisition of KCS. In furtherance of this proposal and
subject to future developments, CN (and, if a negotiated
transaction is agreed, KCS) may file one or more registration
statements, proxy statements, tender offer statements or other
documents with the U.S. Securities and Exchange Commission (“SEC”)
or applicable securities regulators in Canada. This news release is
not a substitute for any proxy statement, registration statement,
tender offer statement, prospectus or other document CN and/or KCS
may file with the SEC or applicable securities regulators in Canada
in connection with the proposed transactions.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), TENDER OFFER
STATEMENT, PROSPECTUS 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 BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED
TRANSACTIONS. Any definitive proxy statement(s),
registration statement or prospectus(es) and other documents filed
by CN and KCS (if and when available) will be mailed to
stockholders of CN and/or KCS, as applicable. Investors and
security holders will be able to 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.
ParticipantsThis news release
is neither a solicitation of a proxy nor a substitute for any proxy
statement or other filings that may be made with the SEC and
applicable securities regulators in Canada. Nonetheless, CN and its
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 transactions. 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.
Additional information regarding the interests of such potential
participants will be included in one or more registration
statements, proxy statements, tender offer statements 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 www.sedar.com, as applicable.
Contacts: |
|
MediaCanadaMathieu GaudreaultCN
Media Relations & Public Affairs(514)
249-4735Mathieu.Gaudreault@cn.ca Longview Communications &
Public AffairsMartin Cej (403) 512-5730 mcej@longviewcomms.ca
United StatesBrunswick GroupJonathan Doorley /
Rebecca Kral(917) 459-0419 / (917)
818-9002jdoorley@brunswickgroup.comrkral@brunswickgroup.com |
Investment CommunityPaul
ButcherVice-PresidentInvestor Relations(514)
399-0052investor.relations@cn.ca |
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