Rival Bidders for Kansas City Southern Respond to U.S. STB's Decision
By Stephen Nakrosis
The rival bidders for railroad company Kansas City Southern
weighed in on a decision by the U.S. Surface Transportation Board,
which was issued Monday.
Both Canadian National Railway Co. and Canadian Pacific Railway
Ltd. are looking to acquire Kansas City Southern.
In March, Canadian Pacific said it had agreed to acquire Kansas
City Southern in a deal valued at about $25 billion, as reported by
The Wall Street Journal. The report said, "Canadian Pacific would
create a trust to acquire Kansas City shares later this year, if
shareholders bless the deal."
In April, Canadian National made a bid of about $30 billion for
Kansas City Southern, also reported by The Wall Street Journal.
On Monday, the Surface Transportation Board said it decided
Canadian National's proposed acquisition of Kansas City Southern
"will be subject to the agency's current merger regulations and
denies a motion to approve a proposed voting trust agreement,
without prejudice, as incomplete."
Responding to the board's decision, Canadian National said, "We
welcome the STB's decision to move forward with reviewing CN's
proposed combination with KCS under the current merger rules, which
requires demonstrating that the combination would enhance
competition." CN also said it "received strong support for its
combination with KCS as evidenced by the over 1,000 letters of
support that have been filed with the STB by customers and other
stakeholders," and added, "as we have stated before, we are
committed to addressing any competitive concerns under the current
merger rules in order to successfully complete a CN-KCS
Meanwhile, Canadian Pacific Railway said, "We concur with the
STB's decision to apply the new merger rules to the proposed CN
transaction." The company also said, "The new merger rules require
that the STB formally approve CN's proposed use of a voting trust.
Though CN had filed a motion seeking such approval, the STB
rejected that motion as incomplete."
Canadian Pacific also said, "With this new ruling by the STB,
CP's confidence in the superiority of its friendly agreement with
KCS is redoubled."
--Write to Stephen Nakrosis at firstname.lastname@example.org
(END) Dow Jones Newswires
May 17, 2021 18:48 ET (22:48 GMT)
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