Kansas City Southern Railway Accepts Canadian Pacific Railway Revised Proposal, Calls off Planned Merger with Canadian National Railway

The Kansas City Southern Railway (KCS) announced on Sunday (9-12-21) the KCS Board of Directors had determined that Canadian Pacific Railways (CP) revised proposal constitutes a “Company Superior Proposal” as defined in the KCS’s merger agreement with Canadian National Railway Company. The KCS Board of Directors made this determination after consultation with the Company’s outside legal and financial advisors.

KCS has notified CN that it intends to terminate KCS’s merger agreement with CN and enter into the definitive agreement with CP, subject to CN’s right to negotiate amendments to the merger agreement for at least five business days and the KCS Board’s further determination as to whether any such amendments would cause the CP proposal no longer to constitute a “Company Superior Proposal.”

Under the terms of CP’s proposal, each share of KCS common stock would be exchanged for 2.884 CP common shares and $90 in cash. In addition, holders of KCS preferred stock would receive $37.50 in cash for each share of KCS preferred stock held.

The proposal is binding on CP and may be accepted by KCS at any time prior to 5:00 pm EDT on Monday, September 20, 2021. The transaction would be subject to approval by the stockholders of CP and KCS, receipt of regulatory approvals, and other customary closing conditions.