CN (TSX: CNR, NYSE: CNI) and Kansas City Southern (NYSE: KSU)
(“KCS”) today announced that three local union committees
representing CN and KCS employees in the United States that are
affiliated with the Brotherhood of Locomotive Engineers and
Trainmen (“BLET”) have filed four letters in support of the
proposed voting trust with the Surface Transportation Board
(“STB”). These letters were filed as part of the STB’s public
comment period for its review of the CN-KCS voting trust, which
will close at midnight today. These letters underscore the
significant benefits for organized labor from a CN-KCS combination.
These local BLET committees represent CN
employees in locations from the Canadian border to the Gulf of
Mexico who have a direct interest in the proposed pro-competitive
CN-KCS combination. The letters express support for CN’s and KCS’
voting trust from officers including the General Chairmen of BLET
General Committees of Adjustment 360, 390 and 910, which
collectively represent more than 1,700 locomotive engineers on CN’s
United States rail operating subsidiaries and approximately 200
engineers working on KCS.
With the submission of these four letters, BLET
adds to the significant labor organization support for the approval
of CN-KCS’ proposed voting trust. CN-KCS have noted earlier letters
of support for the voting trust from officers including the General
Chairmen of SMART-TD General Committees of Adjustment 377, 433, and
987, which collectively represent over 1,800 conductors on CN’s
United States rail operating subsidiaries, as well as International
Brotherhood of Boilermakers (“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.
The plain vanilla voting trust proposed by CN
and KCS, which is identical to the CP trust approved by the STB,
meets the test for approval: (a) it prevents premature control of
KCS; (b) allows KCS to maintain independence during the STB’s
review of the ultimate combination of CN and KCS; and (c) protects
KCS’ financial health during this period.
CN and KCS have taken additional steps to
reinforce the pro-competitive nature of their combination beyond
the scope of the voting trust approval. Specifically, CN will
divest 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. CN and KCS
have also 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.
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 key
stakeholders. CN is committed to working with KCS’ management team
to create new jobs up and down the line.
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.
Contacts:
Media:
CNCanadaMathieu GaudreaultCN Media
Relations & Public Affairs(514)
249-4735Mathieu.Gaudreault@cn.caLongview Communications &
Public AffairsMartin Cej(403)
512-5730mcej@longviewcomms.caUnited
StatesBrunswick GroupJonathan Doorley / Rebecca Kral(917)
459-0419 / (917)
818-9002jdoorley@brunswickgroup.comrkral@brunswickgroup.com |
Investment Community:
CNPaul ButcherVice-PresidentInvestor Relations(514)
399-0052investor.relations@cn.caInvestment Community:
KCSAshley ThorneVice PresidentInvestor Relations(816)
983-1530athorne@kcsouthern.comMacKenzie Partners, Inc.Dan Burch /
Laurie Connell(212) 929-5748 / (212) 378-7071 |
Media: KCSC.
Doniele CarlsonKCS Corporate Communications & Community
Affairs(816) 983-1372dcarlson@kcsouthern.comJoele Frank, Wilkinson
Brimmer KatcherTim Lynch / Ed Trissel(212) 355-4449 |
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