CN (TSX: CNR, NYSE: CNI) today filed with the Surface
Transportation Board ("STB") a request to establish a procedural
schedule for review of the voting trust that CN intends to use for
its planned merger with Kansas City Southern (NYSE: KSU) (“KCS”).
CN’s filing today also includes the merger
agreement with KCS that was finalized on May 13, 2021, when KCS
deemed CN’s proposal superior and announced its intention to
terminate the previously executed March 21, 2021 merger agreement
with Canadian Pacific Railway Ltd. (“CP”).
CN is confident in its ability to gain approval
for the voting trust and ultimately close the combination with KCS,
and looks forward to the STB promptly setting forth its timetable
for reviewing the voting trust.
In its application to the STB, CN requested that
the STB adopt a procedural schedule for a brief public comment
period on CN’s voting trust agreement. CN’s proposed voting trust
structure has been public since April 26, 2021 and has identical
terms and uses the same trustee as CP’s recently approved voting
trust. CN’s filing with the STB also includes its merger agreement
with KCS.
CN is preparing a renewed motion for the STB to
approve its proposed voting trust to be filed on or before Friday,
May 21, 2021. In this filing, CN will show that the significant
public benefits of the transaction can only be achieved through use
of a voting trust, and that these benefits substantially outweigh
any potential public interest harm. CN will also demonstrate that
its strong balance sheet, cash flows and credit ratings profile
provide certainty that CN has the financial integrity to satisfy
the STB’s public interest analysis.
CN is the better bid, better partner, better
railway and best solution for KCS. CN’s proposal provides superior
and more certain value for KCS shareholders and represents a
pro-competitive solution that offers unparalleled opportunities for
customers, employees, shareholders, the environment and the North
American economy.
CN will continue to engage productively and
respectfully with the KCS Board to deliver a superior and
pro-competitive transaction to CN and KCS’ respective
stakeholders.
For more information on CN’s superior proposal
to acquire 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; 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.caLongview Communications &
Public AffairsMartin Cej (403) 512-5730
mcej@longviewcomms.caUnited 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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