CN (TSX: CNR) (NYSE: CNI) and Kansas City Southern (“KCS”) (NYSE:
KSU) today announced that the overwhelming stakeholder support for
their proposed pro-competitive combination continues to grow with
more than 400 additional letters of support filed with the Surface
Transportation Board (“STB”) since the two companies agreed to
combine, taking the total to over 1,400, including a letter of
support from Governor John Bel Edwards of Louisiana.
The proposed combination between CN and KCS will
create a transportation network across North America, enhancing
competition, spurring economic growth and delivering benefits to
the local communities in which both railroads operate. The
combination, with the recent commitment to divesting the sole area
of overlap and keeping gateways open for customers, creates a fully
end-to-end merger and delivers significant public interest benefits
for customers, ports, employees, communities and the environment.
No customer will see any reduction in their existing routes. In
fact, customers will now be able to access new markets that were
not previously available to them via efficient single-line service.
The transaction will also provide an enhanced platform for growth,
capital investment, and job creation. Together, CN and KCS will be
well positioned to deliver on the transaction’s many compelling
benefits.
The benefits of the transaction are underscored
by the more than 400 additional letters that have been filed with
the STB since the two companies agreed to combine on May 21. The
letters express support for a proposed CN-KCS combination, the use
of a voting trust to complete the combination, or both. This brings
the total number of support letters for a CN-KCS combination to
well over 1,400. CN and KCS will continue to communicate and engage
with their customers and other key stakeholders as they work
towards gaining approval of their voting trust and completing their
combination.
Last week’s letter was filed with the STB on May
24. A full copy of the most recent letter filed with the STB
appears below:
Applicants Canadian National Railway
Company (“CN”) and Kansas City Southern (“KCS”) respectfully submit
the enclosed 300 letters from stakeholders relating to CN’s and
KCS’s proposed combination. CN and KCS are encouraged by the
enthusiastic response they have received from customers, rail
suppliers, ports, state and local stakeholders, logistics
providers, and other stakeholders about a CN-KCS combination. This
outpouring of support has now resulted in well over 1,400 total
letters of support for either the proposed CN-KCS combination, for
the proposed voting trust, or for both.1
283 of the letters being filed today
support the proposed combination of KCS and CN. They include a
support letter from John Bel Edwards, Governor of Louisiana, who
expresses his belief that a KCS-CN “combination would serve
Louisiana well by expanding the collective reach of both railroads
and bringing new, sustainable transportation solutions to
businesses in the southeastern part of the state as well as an
East-West corridor across North Louisiana.” Many other letters come
from KCS customers, excited by the extended reach of a combined
CN-KCS network and the opportunities that this creates for them to
reach new markets with competitive single-line service. Other
support letters specifically praise CN’s and KCS’s vision of
converting truck shipments to rail, and the benefits that a CN-KCS
combination could have for north-south trade traffic. In short,
stakeholders are energized about the public benefits that a CN-KCS
combination could bring.
293 of the letters being filed today
support CN’s and KCS’s request that the Board approve their
proposed voting trust agreement.2 Many letters note that the CN-KCS
proposed voting trust is identical to that recently approved by the
Board for Canadian Pacific, and ask the Board to similarly approve
CN’s and KCS’s proposal.
CN and KCS will continue to engage
with industry stakeholders about the proposed CN-KCS combination
and the tremendous public interest benefits it will bring by
creating the premier railway for the 21st century with a single
network across Canada, the United States, and Mexico.
Respectfully submitted,
Sean FinnOlivier ChoucCN935 de La Gauchetière Street West, 16th
Floor Montreal, QC H3B 2M9CANADAKathryn J. GaineyCN601 Pennsylvania
Ave, NWSuite 500, North BuildingWashington, DC
20004Kathryn.gainey@cn.ca |
/s/ Raymond A.
Atkins
Raymond A. AtkinsTerence M. HynesMatthew J. WarrenSidley Austin
LLP1501 K Street, N.W.Washington, DC 20005(202)
736-8000ratkins@sidley.com |
Counsel for Canadian
National Railway Company, Grand Trunk Corporation, and CN’s Rail
Operating Subsidiaries
Adam GodderzThe Kansas City Southern Railway Company427 W 12th
Street(816) 983-1324AGodderz@KCSouthern.com |
/s/ William A.
Mullins
William A. MullinsCrystal ZorbaughBaker and Miller PLLC2401
Pennsylvania Avenue, Suite 300Washington, DC 20037(202)
663-7823WMullins@bakerandmiller.com |
Counsel for Kansas
City Southern, The Kansas City Southern Railway Company, Gateway
Eastern Railway Company, and the Texas Mexican Railway Company
Dated: June 2, 2021
____________________________________1
See Initial Submission of 409 Statements Supporting Proposed
Transaction, CN-4, Canadian National Ry. Co.—Control—Kansas City
So. et al., Fin. Docket No. 36514 (“CN-KCS”) (filed Apr. 26, 2021);
Submission of Port and Terminal Operators’ Statements Supporting
Proposed Transaction, CN-9, CN-KCS (filed Apr. 29, 2021);
Submission of 200 Statements Supporting Proposed Transaction,
CN-10, CN-KCS (filed Apr. 29, 2021); Submission of 100 Statements
Supporting Proposed Transaction And/Or CN’s Voting Trust, CN-12,
CN-KCS (filed May 4, 2021); Submission of 100 Statements Supporting
Proposed Transaction And/Or CN’s Voting Trust, CN-13, CN-KCS (filed
May 7, 2021); Submission of 183 Additional Statements Regarding
Proposed Transaction And/Or CN’s Voting Trust, CN-14, CN-KCS (filed
May 12, 2021); Submission of 100 Additional Statements Regarding
Proposed Transaction And/Or CN’s Voting Trust, CN-17, CN-KCS (filed
May 24, 2021).
2 276 of the enclosed letters express
support for both the proposed combination and the voting trust.
For more information about CN’s and KCS’ pro-competitive
combination, please visit www.ConnectedContinent.com.
About CNCN 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
SouthernHeadquartered 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
StatementsCertain 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 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’s 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 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
ItIn connection with the proposed transaction, CN will
file with the SEC a registration statement on Form F-4 to register
the shares to be issued in connection with the proposed
transaction. The registration statement will include a preliminary
proxy statement of KCS which, when finalized, will be sent to the
stockholders of KCS seeking their approval of the merger-related
proposals. This news release is not a substitute for the proxy
statement or registration statement or other document 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 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. 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’s Corporate Secretary’s
Office by telephone at 1-888-800-3690 or by email at
corpsec@kcsouthern.com.
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, 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 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. 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 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 from www.sedar.com, as applicable.
Contacts:
Media: CNCanadaMathieu
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.comMedia:
KCSC. Doniele CarlsonKCS Corporate Communications &
Community Affairs(816) 983-1372dcarlson@kcsouthern.com Joele Frank,
Wilkinson Brimmer KatcherTim Lynch / Ed Trissel(212) 355-4449 |
Investment Community: CNPaul
ButcherVice-PresidentInvestor Relations(514)
399-0052investor.relations@cn.ca Investment Community:
KCSAshley ThorneVice PresidentInvestor Relations(816)
983-1530athorne@kcsouthern.com MacKenzie Partners,
Inc.Dan Burch / Laurie Connell(212) 929-5748 / (212) 378-7071 |
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