Canadian National announced this week an offer to acquire Kansas City Southern in a cash-and-stock transaction valued at $33.7 billion, or $325 per share. The offer, submitted in a letter to KCS’s board of directors, follows a $29 billion offer from Canadian Pacific Railway in March to buy the nation’s smallest Class I railroad.
Under the terms of the proposal, following closing into a voting trust, KCS shareholders will receive $200 in cash and 1.059 shares of CN common stock for each KCS common share. Based on the March 19, 2021, closing price of CN shares, CN’s proposal is valued at $325 per KCS share.
The offer represents a 21% improvement over the current value of KCS’ agreement with CP, CN said in a release.
In the proposal submitted to KCS’s board of directors, CN President and CEO JJ Ruest said combining the companies offers greater choice and efficiencies for customers. He added that CN has long admired KCS’s customer-focused vision and commitment to safety, service and performance.