- Kansas City Southern (KCS) has provided notice of termination of the merger agreement with CN (CNR)
- KCS will pay a US$700 million cash “Company Termination Fee” and a US$700 million cash “CP Termination Fee Refund” to CN
- The notice of termination from KCS follows the mutually agreed early termination of the match period provided for in the CN merger agreement
- CN intends to continue pursuing profitable growth and opportunities
- CN is a world-class transportation leader and trade enabler
- Canadian National Railway Company (CNR) is down 0.58 per cent, trading at C$146.94 per share at 2:54 pm ET
Kansas City Southern (KCS) has provided notice of termination of the merger agreement with CN (CNR).
KCS will pay CN the US$700 million cash “Company Termination Fee” as well as the US$700 million cash “CP Termination Fee Refund” provided for in the CN merger agreement. CN is not obligated to pay any termination fees as a result of the termination of the CN merger agreement.
The notice of termination from KCS follows the mutually agreed early termination of the match period provided for in the CN merger agreement. There have been significant changes to the U.S. regulatory landscape since CN launched its initial proposal which has made completing any Class I merger much less certain, including an Executive Order focused on competition issued by President Biden in July.
JJ Ruest, President and Chief Executive Officer of CN commented on the development.
“While we are disappointed that we will not be able to deliver the many compelling benefits of this transaction to our stakeholders, the decision to bid for KCS was a bold and strategic move that still resulted in positive outcomes for CN. We believe that the decision not to pursue our proposed merger with KCS any further is the right decision for CN as responsible fiduciaries of our shareholders’ interests.
CN will continue to pursue profitable growth and opportunities for excellence as a leading Class I railroad, and we look forward to outlining more details on our strategic, operational and financial priorities in the near future.”
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.
Canadian National Railway Company (CNR) is down 0.58 per cent, trading at C$146.94 per share at 2:54 pm ET.