Support Grows for CP+KCS as DOJ Affirms Anticompetitive Concerns with CN Proposal
More than 680 Letters Now Filed with STB Cite CP-KCS Competitive Benefits, Urge Swift Review
CP Confident in Superior Status as Only Viable Class 1 Merger Partner to KCS
May 17, 2021 CALGARY Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) (CP) today announced that more than 130 additional
stakeholders have filed statements with the Surface Transportation Board (STB) supporting CPs planned, friendly merger with Kansas City Southern (KCS), bringing the total submitted to date to more than 680. There are
also more than 110 letters filed with the STB expressing concern about the Canadian National (CN) proposal.
The letters highlight that a
combined CP and KCS would, among other benefits, invigorate transportation competition, expand access to existing and growing markets and provide new service offerings that would improve transit times and reliability along the Canada-U.S.-Mexico corridor.
Last Friday, the Department of Justice (DOJ) filed comments with the STB
objecting to CNs proposed use of a voting trust on the grounds that a CN merger with KCS would pose greater risks to competition than the CP-KCS agreement.
The DOJs position is consistent with CPs assessment that CNs proposal is illusory and offers unattainable value to KCS shareholders.
CP remains confident its friendly agreement with KCS is superior to the CN proposal because CP+KCS is the only viable Class 1 merger, as validated
by two favorable rulings by the STB. The STB has approved CPs use of a voting trust and affirmed KCS waiver from the new rail merger rules it adopted in 2001 because a CP-KCS combination is truly end-to-end, pro-competitive and together they would remain the smallest Class 1 railway.
CP is seeking approval from the STB for the combination, which also remains subject to the approvals of CP and KCS shareholders and other customary closing
conditions. The STB review is expected to be completed by the middle of 2022.
For more information on the transaction and the benefits it is expected to
bring to the full range of stakeholders, visit FutureForFreight.com.
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