Bidding war erupts in railway world as CN outbids CP for Kansas City Southern

Business

Canadian National Railway Co. is trying to buy U.S. railway Kansas City Southern out from under the nose of rival Canadian Pacific, which launched a takeover offer of its own for the U.S. carrier last month.

CN Rail is trying to buy Kansas City Southern railway, weeks after the latter signaled its intent to merge with CN's rival CP.(Darryl Dyck/The Canadian Press)

Canadian National Railway Co. has offered to buy U.S. railway Kansas City Southern in a cash-and-stock bid valued at $33.7 billion US.

The offer of $325 a share plus agreeing to take over $3.8 billion worth of KCS's debt tops a proposal made by Canadian Pacific Railway for KCS last month, one that offered $275 a share for a total price tag of $25 billion.

The move would bring ports and rail lines in the United States, Mexico and Canada together under one network to create the most far-reaching transportation networks in North America.

"CN and KCS have highly complementary networks with limited overlap that will enable them to accelerate growth in single-owner, single-operator, end-to-end service across North America," CN president J.J. Ruest said in a statement.

"With safer service and better fuel efficiency on key routes from Mexico through the heartland of America, the result will be a safer, faster, cleaner and stronger railway."

More to come

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Credit belongs to : www.cbc.ca

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