Letter from International Brotherhood of
Boilermakers filed with the STB underscores benefits for organized
labor of CN-KCS voting trust agreement and pro-competitive
combination
CN (TSX: CNR) (NYSE: CNI) and Kansas City Southern (NYSE: KSU)
(“KCS”) today announced that the International Brotherhood of
Boilermakers (“IBB”) filed a letter of support for CN’s and KCS’
proposed voting trust with the Surface Transportation Board
(“STB”). This letter from IBB, one of the oldest unions in the
United States representing more than 50,000 skilled craftsmen and
craftswomen and industrial workers throughout the United States and
Canada, underscores the significant benefits for organized labor
from a CN-KCS combination.
The IBB has a direct interest in the proposed pro-competitive
CN-KCS combination. As a larger, continental enterprise with
complementary routes and an enhanced platform for revenue growth,
capital investment and job creation, the combined company would be
well-positioned to create new growth opportunities for customers,
labor partners, employees and other stakeholders. CN is committed
to working with KCS’ management team to create new jobs up and down
the line.
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.
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.
CN and KCS look forward to further comment from their
stakeholders during the STB’s official public comment period on the
voting trust application, which will be open until June 28, 2021,
as they work towards gaining STB approval of their voting trust and
completing their combination.
A full copy of the letter filed with the STB appears below:
The Honorable Cynthia T. Brown Chief, Section
of Administration Office of Proceedings Surface Transportation
Board 395 E. Street, S.W. Washington, DC 20423-0001
Re: FD 36514, Canadian National Railway
Company, Grand Trunk Corporation, and CN’s Rail Operating
Subsidiaries—Control—Kansas City Southern, the Kansas City Southern
Railway Company, Gateway Eastern Railway Company, and the Texas
Mexican Railway Company
Dear Ms. Brown:
Central to Canadian National’s bid for Kansas
City Southern is the establishment of a voting trust that benefits
Kansas City Southern shareholders. The International Brotherhood of
Boilermakers unequivocally supports approval of Canadian National’s
voting trust. Canadian National proposes to use the same voting
trust structure as Canadian Pacific Railway, which the Board
approved with a modification. For the reasons the STB provided in
making its decision, we believe Canadian National’s voting trust
should also receive approval. The ap-proval of Canadian National’s
voting trust will allow Kansas City Southern shareholders to make a
fully informed decision when plac-ing their votes to approve the
transaction, and upon approval, to receive the full value of their
shares while the STB considers Canadi-an National’s case for a
combined, end-to-end rail network.
The Kansas City Southern-Canadian National
voting trust—as well as their request that the STB review their
voting trust with a period for public comment—demonstrates clearly
the stakeholder-focused approach to business that Canadian National
has demonstrated during our relationship. We look forward to seeing
Canadian National’s commitment to fairness and efficiency reflected
in the STB’s review of the voting trust.
Sincerely,
/s/
John Mansker Director of Rail Division
International Brotherhood of Boilermakers
cc: Parties of Record
Respectfully submitted,
Sean Finn Olivier Chouc CN 935
de La Gauchetière Street West, 16th Floor Montreal, QC H3B 2M9
CANADA Kathryn J. Gainey CN 601 Pennsylvania Ave, NW Suite 500,
North Building Washington, DC 20004 Kathryn.gainey@cn.ca
/s/ Raymond A.
Atkins Raymond A. Atkins Terence M. Hynes Matthew J. Warren
Sidley Austin LLP 1501 K Street, N.W. Washington, DC 20005 (202)
736-8000 ratkins@sidley.com
Counsel for Canadian National
Railway Company, Grand Trunk Corporation, and CN’s Rail Operating
Subsidiaries
Adam J. Godderz Kansas City Southern P.O.
Box 219335 Kansas City, MO 64121-9335 (816) 983-1324
AGodderz@KCSouthern.com
/s/ William A.
Mullins William A. Mullins Crystal M. Zorbaugh Baker &
Miller PLLC 2401 Pennsylvania Avenue, Suite 300 Washington, DC
20037 (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 22, 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’
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 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 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. The
registration statement includes 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. The
registration statement has not yet become effective. This news
release is not a substitute for the proxy statement or registration
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 PRELIMINARY
PROXY STATEMENT, THE REGISTRATION STATEMENT, THE 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 (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) 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’ 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’ 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 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20210623005771/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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