CN (TSX: CNR, NYSE: CNI) today reaffirmed its commitment to its
pro-competitive combination with Kansas City Southern (NYSE: KSU)
(“KCS”).
“We are pleased that the KCS board of directors
has reiterated that the agreed transaction with CN is superior and
recommends that stockholders vote FOR our pro-competitive
combination. CN and KCS are committed to moving forward to create
the premier railway for the 21st century. Together, we will enhance
competition, drive economic growth and realize the benefits of a
fully end-to-end transportation network connecting North America.
We look forward to continuing to work with KCS to deliver this
compelling combination to both companies’ stakeholders.”
— JJ Ruest, President and Chief Executive Officer of CN
Superior Agreed Transaction Between CN
and KCSAs previously announced on May 21, 2021, KCS
entered into a definitive agreement with CN, pursuant to which CN
agreed to acquire KCS in a stock and cash transaction valued at
$325 per KCS share.1 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.
KCS Special Meeting of
StockholdersCN and KCS’ joint voting trust application is
currently under review by the Surface Transportation Board (“STB”).
The STB has stated that it expects to issue a decision on the
voting trust no later than August 31, 2021. CN is confident that
the voting trust meets all the standards and the public interest
test set forth by the STB and believes that it should be approved.
KCS shareholders will receive the merger consideration immediately
upon the closing of the voting trust, which is subject to receipt
of KCS shareholder approval and Mexican regulatory approvals.
In light of the STB disclosing the timetable for
its decision, CN supports the decision by the KCS board of
directors to adjourn the KCS Special Meeting of Stockholders if the
STB has not released a public decision on the CN-KCS joint voting
trust application by August 17, 2021, at 6:00 p.m., Central
Time.
For more information on CN’s pro-competitive
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.
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 CN and 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’ 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 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:
MediaCanadaMathieu GaudreaultCN
Media Relations & Public Affairs(514) 249-4735Media@cn.ca
Longview 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 |
1 Based on the CN and KCS closing prices on May 12, 2021.
Canadian National Railway (TSX:CNR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Canadian National Railway (TSX:CNR)
Historical Stock Chart
From Apr 2023 to Apr 2024