CALGARY, AB, April 22, 2021 /PRNewswire/ - The North
Dakota Grain Dealers Association today filed a letter with the
Surface Transportation Board re-iterating its support of the
Canadian Pacific (TSX: CP) (NYSE: CP)-Kansas City Southern
combination. In the letter, the association also expressed its
opposition to the Canadian National bid.
The full text of the letter reads:
The North Dakota Grain Dealers
Association (NDGDA) hereby files this letter to express its
opposition to the bid by CN to acquire KCS and re-iterate its
support for the CP-KCS combination.
As expressed in our initial letter
to the Board dated March 30, 2021,
NDGDA supports swift approval of the CP-KCS combination because of
the significant benefits the combination should bring, including
expanded markets to the North
Dakota grain shippers serviced by CP and strengthened
competition against the other, larger rail carriers and trucks that
serve our members' markets.
The backbone of North Dakota's economy is agriculture and over
80% of North Dakota's grain
production moves to market by rail. North
Dakota's grain shippers are in a captive rail market which
limits competition and our options for market destinations. A
CP-KCS combination should provide CP grain shippers expanded access
to markets across the United
States, Mexico,
Canada, and even internationally.
The bid by CN would effectively end any opportunity for market
expansion for North Dakota CP grain shippers.
In addition, a CPKC network should
increase competition between North
Dakota's rail carriers and trucks that serve our members'
markets. We expect a combined CPKC network to offer seamless,
single-line service that will improve our transportation options
and provide a better alternative to the options that already exist.
As mentioned, North Dakota is a
captive rail market but a CPKC network should provide alternatives
that would increase competition between North Dakota's Class 1 carriers. A CN-KCS
combination would do nothing to benefit North Dakota shippers but would instead
decrease competition overall.
Respectfully submitted,
Stu
Letcher
Executive Vice President
North Dakota Grain Dealers Association
Forward-looking statements and information
This news
release includes certain forward looking statements and forward
looking information (collectively, FLI) to provide CP and KCS
shareholders and potential investors with information about CP, KCS
and their respective subsidiaries and affiliates, including each
company's management's respective assessment of CP, KCS and their
respective subsidiaries' future plans and operations, which FLI may
not be appropriate for other purposes. FLI is typically identified
by words such as "anticipate", "expect", "project", "estimate",
"forecast", "plan", "intend", "target", "believe", "likely" and
similar words suggesting future outcomes or statements regarding an
outlook. All statements other than statements of historical fact
may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its nature, FLI
involves a variety of assumptions, which are based upon factors
that may be difficult to predict and that may involve known and
unknown risks and uncertainties and other factors which may cause
actual results, levels of activity and achievements to differ
materially from those expressed or implied by these FLI, including,
but not limited to, the following: the timing and completion of the
transaction, including receipt of regulatory and shareholder
approvals and the satisfaction of other conditions precedent;
interloper risk; the realization of anticipated benefits and
synergies of the transaction and the timing thereof; the success of
integration plans; the focus of management time and attention on
the transaction and other disruptions arising from the transaction;
estimated future dividends; financial strength and flexibility;
debt and equity market conditions, including the ability to access
capital markets on favourable terms or at all; cost of debt and
equity capital; the pending share split of CP's issued and
outstanding common shares; potential changes in the CP share price
which may negatively impact the value of consideration offered to
KCS shareholders; the ability of management of CP, its subsidiaries
and affiliates to execute key priorities, including those in
connection with the transaction; general Canadian, U.S., Mexican
and global social, economic, political, credit and business
conditions; risks associated with agricultural production such as
weather conditions and insect populations; the availability and
price of energy commodities; the effects of competition and pricing
pressures, including competition from other rail carriers, trucking
companies and maritime shippers in Canada, the U.S. and Mexico; industry capacity; shifts in market
demand; changes in commodity prices; uncertainty surrounding timing
and volumes of commodities being shipped; inflation; geopolitical
instability; changes in laws, regulations and government policies,
including regulation of rates; changes in taxes and tax rates;
potential increases in maintenance and operating costs; changes in
fuel prices; disruption in fuel supplies; uncertainties of
investigations, proceedings or other types of claims and
litigation; compliance with environmental regulations; labour
disputes; changes in labour costs and labour difficulties; risks
and liabilities arising from derailments; transportation of
dangerous goods; timing of completion of capital and maintenance
projects; currency and interest rate fluctuations; exchange rates;
effects of changes in market conditions and discount rates on the
financial position of pension plans and investments; trade
restrictions or other changes to international trade arrangements;
the effects of current and future multinational trade agreements on
the level of trade among Canada,
the U.S. and Mexico; climate
change and the market and regulatory responses to climate change;
anticipated in-service dates; success of hedging activities;
operational performance and reliability; customer, shareholder,
regulatory and other stakeholder approvals and support; regulatory
and legislative decisions and actions; the adverse impact of any
termination or revocation by the Mexican government of Kansas City
Southern de Mexico, S.A. de C.V.'s
Concession; public opinion; various events that could disrupt
operations, including severe weather, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; material adverse changes in economic and industry
conditions, including the availability of short and long-term
financing; and the pandemic created by the outbreak of COVID-19 and
resulting effects on economic conditions, the demand environment
for logistics requirements and energy prices, restrictions imposed
by public health authorities or governments, fiscal and monetary
policy responses by governments and financial institutions, and
disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be found
in reports and filings by CP and KCS with Canadian and U.S.
securities regulators, including any proxy statement, prospectus,
material change report, management information circular or
registration statement to be filed in connection with the
transaction. Due to the interdependencies and correlation of these
factors, as well as other factors, the impact of any one
assumption, risk or uncertainty on FLI cannot be determined with
certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
About Canadian Pacific
Canadian Pacific is a
transcontinental railway in Canada
and the United States with direct
links to major ports on the west and east coasts. CP provides North
American customers a competitive rail service with access to key
markets in every corner of the globe. CP is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise. Visit cpr.ca to see
the rail advantages of CP. CP-IR
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SOURCE Canadian Pacific