The Canadian National Railway Submits a $30 billion Offer to Purchase the Kansas City Southern, Setting Off a Bidding War with the Canadian Pacific Railroad

The Canadian National Railway (CN) has just submitted an offer to purchase the Kansas City Southern Railroad (KCS) for $30 billion, starting what could possibly be a bidding war with the Canadian Pacific Railway (CP) which previously offered $25 billion last month. Canada’s two biggest railroads are vying for a rail network that links their country with the U.S. and Mexico as a reworked trade alliance gets underway and the economic recovery from the Covid-19 pandemic gathers steam. Kansas City Southern’s sprawling system connects farms in the U.S. Midwest to ports along the Gulf of Mexico. It also reaches deep into Mexico, which made up almost half of the Kansas City, Missouri-based company’s revenue last year. In an interview with Bloomberg TV, CN Chief Executive Officer Jean-Jacques Ruest said, “Railroads don’t come for sale very often. Our vision has been for a long time to create a very solid north-south network.” Ruest in an interview with analysis went onto say that, the combination would create a “railroad that can really rival with truck. A lot of the freight today that moves north-south is only getting a partial ride by rail or is actually moving all truck, and these are huge distances.”