Canadian National Railway Issues Rival Bid of Nearly $34B for Kansas City Southern
About a month after Canadian Pacific (CP) announced its plans to acquire and merge with Kansas City Southern (KSC) for $29 billion, Canadian National Railway CN has issued a rival bid for the railroad.
CN announced it was laying on the table a potential cash-and-stock offer worth nearly $34 billion, or $325 per share, saying that its bid provided “greater value and certainty” to KSC shareholders compared to CP’s deal. KCS acknowledged receiving the offer, and later issued a joint statement with CP stating that 400 shippers and other stakeholders have submitted letters to the Surface Transportation Board supporting CP’s original deal. CP also noted that CN’s rival bid raises more competition concerns compared to its deal, due to CN and KCS having several competing rail lines, adding that it was highly complex and likely to fail. CP’s proposed deal would create a combined company operating about 20,000 miles of railway, with 20,000 employees, generating about $8.7 billion in annual revenue, despite being the smallest of all the major railroads.