Additional 100 letters from customers,
suppliers, elected officials and other stakeholders filed with the
STB highlighting benefits of CN and KCS combination
CN (TSX: CNR) (NYSE: CNI) and Kansas City Southern (NYSE: KSU)
(“KCS”) today announced that support for their pro-competitive
proposed combination continues to grow.
One hundred additional letters have been sent to CN and KCS and
filed with the Surface Transportation Board (“STB”) in favor of a
combination between the two companies, bringing the total number of
support letters CN and KCS have received to greater than 1,500.
Importantly, 90 of the letters being filed today support CN’s and
KCS’s request that the Board approve their proposed voting trust
agreement.
The plain vanilla voting trust, which is identical to the CP
trust approved for use by the STB, 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.
It also enables KCS shareholders to realize the full value of their
shares without the delay related to this review. Additionally, CN
has committed to divesting the sole area of overlap between the CN
and KCS networks – KCS’ 70-mile line between New Orleans and Baton
Rouge – thereby making the combination a true end-to-end
transaction, and has agreed to preserve existing route options by
keeping gateways open on commercially reasonable terms. The
proposed CN-KCS combination represents a pro-competitive solution
that offers unparalleled opportunities for customers, employees,
shareholders, the environment and the North American economy.
Stakeholders from both CN and KCS’ networks, including U.S.
Representative Jerry Carl (AL-01), the Jerseyville Economic
Development Council and the Port of Gulfport, MS, continue to
express overwhelming support for the combination, underscoring the
significant benefits available through a CN-KCS combination.
CN and KCS look forward to further comment and engagement from
their stakeholders during the STB’s official public comment period,
which will be open until June 28, 2021, as they work towards
gaining approval of their voting trust and completing their
combination.
A full copy of CN’s letter filed with the STB appears below:
Applicants Canadian National Railway Company
(“CN”) and Kansas City Southern (“KCS”) respectfully submit the
enclosed 100 letters from stakeholders relating to CN’s and KCS’s
proposed combination. Stakeholders from all across the networks of
CN and KCS continue to express overwhelming support for the
combination of the two companies, which stakeholders describe as
being pro-competitive, an exciting opportunity for expansion, and a
boon for the rail network writ large. This latest filing brings the
total number of letters submitted to more than 1,500, each of which
expresses support for the transaction, support for the proposed
voting trust, or both.1
88 of the letters being filed today support
the proposed combination of KCS and CN. They include a support
letter from The Honorable Jerry Carl, United States House of
Representatives, who draws upon his extensive experience working
with KCS in his former capacity as a commissioner of Mobile County.
He describes CN as “responsive” and open to the needs of residents.
He also expresses his view that the combination will be beneficial
for both railroads, for sustainability in the industry, and for the
prosperity of the residents of Southwest Alabama.
Other letters come from entities such as the
Jerseyville Economic Development Council, which has been working
with KCS for a number of years to establish a 1,600 acre
manufacturing and distribution development. The rail service by KCS
provides the north-south transportation access that is the
“cornerstone” of this development, and the Council views the CN-KCS
combination as enhancing that trade by bringing cleaner, faster,
and more direct service. The Council asserts that this combination
will help achieve the potential of the USMCA trade agreement.
The Port of Gulfport, MS, also voices its
support to the proposed CN-KCS combination. The Port expresses in
its submission its view that the combination will “facilitate trade
and economic prosperity across the United States.” The letter also
observes that KCS has long been “integral” to the businesses of
Gulfport, connecting them to markets around the World. The CN-KCS
combination, in the view of the Port, will offer a sustainable
transportation option that will expand the reach of Gulfport
industry while reducing greenhouse gas emissions.
90 of the letters being filed today support
CN’s and KCS’s request that the Board approve their proposed voting
trust agreement.2 Many of these supporters express their view that
the proposed CN voting trust is identical to that proposed by CP
which the Board has approved. These supporters respectfully urge
the Board to grant approval of the CN voting trust so that the
transaction may be evaluated on a level playing field.
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,
/s/ Raymond A.
Atkins
Sean Finn
Raymond A. Atkins
Olivier Chouc
Terence M. Hynes
CN
Matthew J. Warren
935 de La Gauchetière Street West,
Sidley Austin LLP
16th Floor
1501 K Street, N.W.
Montreal, QC H3B 2M9
Washington, DC 20005
CANADA
(202) 736-8000
ratkins@sidley.com
Kathryn J. Gainey
CN
601 Pennsylvania Ave, NW
Suite 500, North Building
Washington, DC 20004
Kathryn.gainey@cn.ca
Counsel for Canadian National Railway
Company, Grand Trunk Corporation, and CN’s Rail Operating
Subsidiaries
/s/ William A.
Mullins
Adam J. Godderz
William A. Mullins
Kansas City Southern
Crystal M. Zorbaugh
P.O. Box 219335
Baker & Miller PLLC
Kansas City, MO 64121-9335
2401 Pennsylvania Avenue, Suite 300
(816) 983-1324
Washington, DC 20037
AGodderz@KCSouthern.com
(202) 663-7823
WMullins@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 17, 2021
For more information about CN’s and KCS’ pro-competitive
combination, 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.
About Kansas City Southern
Headquartered 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 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 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’s
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’s results of operations appear in Part I, Item 1A “Risks
Related to KCS’s Operations and Business” of KCS’s Annual Report on
Form 10-K for the year ended December 31, 2020, and in KCS’s 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 Solicitation
This 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 It
In 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.
Participants
This 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’s 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.
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 300 Additional Statements Supporting
Proposed Transaction And/Or CN’s Voting Trust, CN-17, CN-KCS (filed
May 24, 2021); Submission of 100 Additional Statements Regarding
Proposed Transaction And/Or CN’s Voting Trust, CN-19, CN-KCS (filed
June 2, 2021).
2 78 letters express support for both the voting trust and the
proposed combination.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210617005452/en/
Media: CN Canada
Mathieu Gaudreault CN Media Relations & Public Affairs (514)
249-4735 Mathieu.Gaudreault@cn.ca
Longview Communications & Public Affairs Martin Cej (403)
512-5730 mcej@longviewcomms.ca
United States Brunswick Group Jonathan Doorley / Rebecca
Kral (917) 459-0419 / (917) 818-9002 jdoorley@brunswickgroup.com
rkral@brunswickgroup.com
Media: KCS C. Doniele
Carlson KCS Corporate Communications & Community Affairs (816)
983-1372 dcarlson@kcsouthern.com
Joele Frank, Wilkinson Brimmer Katcher Tim Lynch / Ed Trissel
(212) 355-4449
Investment Community: CN
Paul Butcher Vice-President Investor Relations (514) 399-0052
investor.relations@cn.ca
Investment Community: KCS
Ashley Thorne Vice President Investor Relations (816) 983-1530
athorne@kcsouthern.com
MacKenzie Partners, Inc. Dan Burch / Laurie Connell (212)
929-5748 / (212) 378-7071
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