CN (TSX: CNR, NYSE: CNI) today issued the following statement in
response to the recent decision by the Surface Transportation Board
(“STB”) in relation to CN’s proposed combination with Kansas City
Southern (NYSE: KSU) (“KCS”):
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We are disappointed in the STB’s decision regarding the joint
voting trust application filed by CN and KCS. We are evaluating the
options available to us in light of the STB’s decision.We remain
confident that our pro-competitive, end-to-end combination is in
the public interest and that it would offer unparalleled
opportunities and benefits for customers, employees, the
environment and the North American economy. The combined company
would create the premier railway for the 21st century and establish
seamless single-line service from Canada, through the United States
and into Mexico.Since the proposed combination with KCS was
announced, we have been encouraged by the overwhelming support from
both companies’ customers, employees, local communities and
shareholders. We continue to believe that the combination of CN and
KCS would enhance competition, expand North American trade and
power economic prosperity, provide new and faster routes, increase
supply chain efficiency and deliver other benefits to the public
good. |
About CNCN 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.
Forward-Looking
StatementsCertain 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 CN and 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 SolicitationThis
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
ItIn 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, and the registration statement has been declared
effective. CN has filed with the SEC its prospectus and KCS has
filed with the SEC its definitive proxy statement in connection
with the proposed transaction, and the KCS proxy statement is being
sent to the stockholders of KCS seeking their approval of the
merger-related proposals. This news release is not a substitute for
the registration statement, the prospectus, the proxy 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 REGISTRATION STATEMENT, THE PROSPECTUS, THE PROXY STATEMENT 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 CONTAIN AND WILL CONTAIN
IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED TRANSACTION.
Investors and security holders may 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.
ParticipantsThis news release
is neither a solicitation of a proxy nor a substitute for the
registration statement, the prospectus, the 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 transaction.
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 is or may be included in the registration statement,
the prospectus, the proxy statement 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: |
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MediaCanadaMathieu GaudreaultCN
Media Relations & Public Affairs(514)
249-4735Mathieu.Gaudreault@cn.caLongview Communications &
Public AffairsMartin Cej (403) 512-5730
mcej@longviewcomms.caUnited StatesBrunswick
GroupJonathan Doorley / Rebecca Kral(917) 459-0419 / (917)
818-9002jdoorley@brunswickgroup.comrkral@brunswickgroup.com |
Investment CommunityPaul
ButcherVice-PresidentInvestor Relations(514)
399-0052investor.relations@cn.ca |
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