The Railway group The Canadian National has made $ 33.7bn in Kansas City Southern, including debt, as it seeks to cancel a US deal last month with Canada Pacific.
A Montreal-based company has donated cash and shares to Kansas City Southern for $ 325 per share, about 21% more than he agreed to give from the Pacific Ocean. However, it needs to be closely monitored because of its size.
According to the agreement, Canada National provided shareholders in Kansas City $ 200 in cash and 1,059 shares of ordinary CN. Canada Pacific donated $ 90 and the balance. To pay for the deal, CP said it would offer new 44.5m shares and raise $ 8.6bn in debt.
Anyone who wins the Canadian war in Kansas City Southern, the smallest of the seven railways carrying U.S. cargo, has eliminated the first railway operation since 1999, when CSX and Norfolk Southern found Conrail and shared it among themselves.
A neighbor in Kansas City Southern said the U.S. team was seriously considering the same competition but warned it would be difficult to sell to the Surface Transportation Board, U.S. railway regulators who would have to approve any merger.
Joining a team in Canada to launch the first North American railway through Mexico, the US and Canada. The Canadian National Council, announcing the petition on Tuesday, said the increase in funding would help keep Kansas City’s shareholders more confident and reduce the air pollution and greenhouse gas emissions.
Both Canada National and Canada Pacific operate in the central and eastern US, as do CSX and Norfolk Southern, while Union Pacific and BNSF are located in the west.
Kansas City Southern is the only operational north and south with a route from Missouri to the coastal ports of Mexico. It owns a 50 per cent stake in the Panama Canal Railway Company.
For all Canadian companies the partnership is great bet on sales shipping after approval last year on a trade agreement between US-Mexico and Canada, which ushered in the North American Trade Agreement.
Canada National said the agreement would allow the company to create a $ 8bn market between the three countries, as it seeks to expand other network services such as Laredo, Texas, southern Ontario and Detroit.
Jean-Jacques Ruest, head of Canada National, wrote a letter to the Kansas City Southern board that the merger brings in $ 1bn a year in synergies, especially those run by a new business instead of cutting down trees.
A betting battle in Kansas City South comes between the speed of the connection and purchase function over the past 12 months, as companies that have done well during the epidemic are looking to seize resources to boost their operations.
Shares in Canada National are up 70% from the end of March 2020, although the company fell 5.9% in Toronto following a competitive announcement.