Canadian National Railroad outbid Canadian Pacific in its attempt to buy the Kansas City Southern Railroad.
Global News says Kansas City Southern determined that CN’s revised bid of $33.6 billion was better than the $25 billion it had already gotten from Canadian Pacific. The new CN offer includes $200 in cash for each KC Southern share, but Canadian National upped its offer of 1.129 shares of its stock. The transaction also includes about $3.8 billion in Kansas City Southern’s debt.
Canadian National’s President says the combined railroad will connect Canada with the U.S. and Mexico and take advantage of the expected growth in trade between the three nations in the U.S.-Mexico-Canada Agreement. KC Southern had been reviewing both bids and holding talks with both potential buyers since CN got involved with the bidding last month. So far, Canadian Pacific has declined to up its offer for KC Southern.
CP officials say the Canadian National deal will have trouble getting approved by regulators concerned about the deal’s impact on competition. CP says combining KC Southern and Canadian National would hurt competition because they both have rail lines that compete for business between the Midwest and the Gulf Coast. Canadian Pacific’s network connects to KC Southern near its headquarters, but the two railroads don’t overlap elsewhere.
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