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 Partnersat the phone numbers listed below.1407 Broadway,
27th FloorNew York, NY 10018email: 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 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 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 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 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.
ParticipantsThis 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.
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.caInvestment Community:
KCSAshley ThorneVice PresidentInvestor Relations(816)
983-1530athorne@kcsouthern.com MacKenzie Partners, Inc.Dan Burch /
Laurie Connell(212) 929-5748 / (212) 378-7071
dburch@mackenziepartners.comlconnell@mackenziepartners.com |
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