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Two Canadian Railways Compete for Kansas City Southern

Home News Two Canadian Railways Compete for Kansas City Southern

Kansas City Southern (KCS) acquisition proposal is the first time Class I railways have tried to combine since the STB issued revised antitrust regulations in 2001

North American railways have suddenly become hotter, and it has nothing to do with the summer heat.

Drama is ensuing over proposals for one of two major Canadian railways to acquire Kansas City Southern. Stakeholders across the supply chain are watching the situation unfold — especially shippers, who are trying to determine whether and how a cross-border acquisition by either entity could affect their movement of goods.

At the moment, Canadian National has the upper hand. In May, KCS agreed to be acquired by CN in a deal valued at $33 billion, and KCS’ shareholders are voting on an aspect of the deal on Aug. 19.

But it was Canadian Pacific that first proposed to acquire KCS for $29 billion in March. Despite having agreed to that acquisition first, KCS backed out after receiving a higher, unsolicited bid from CN. While it originally refused to enter what it called a “bidding war,” CP submitted a new $31 billion bid this month. On Thursday, Kansas City Southern rejected that offer, asking its shareholders to approve the CN deal instead.

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Source: Supplychain Dive

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