Canadian National Makes Rival Bid For Kansas City Southern Valued at $33.7 Billion

MONTREAL — Canadian National Railway announced Tuesday, April 20, that it has made a proposal to combine with Kansas City Southern in a cash-and-stock transaction valued at $33.7 billion, or $325 per share.*

Together, CN and KCS will create a railway that connects ports and rails in the United States, Mexico, and Canada and provide improved service, enhanced competition, and new market access to move goods across North America efficiently and safely, according to a CN news release.

This combination will also significantly expand the combined company’s total addressable market and provide growth opportunities across the rapidly growing USCMA network, according to

Under the terms of the proposal made today to KCS’ Board of Directors, 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 Monday, April 19, closing price of CN shares, CN’s proposal is valued at $325 per KCS share.


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This represents an implied premium of 45% when compared to KCS’ unaffected closing stock price on March 19, 2021 and an 21% improvement over the current value of KCS’ agreement with Canadian Pacific Railway Limited.

CN currently estimates that the combination would result in EBITDA synergies approaching $1 billion annually, with the vast majority of synergies coming from additional revenue opportunities.

CN anticipates the transaction to be accretive to CN’s adjusted diluted earnings per share** in the first full year following CN assuming control of KCS.

These are conservative estimates based on publicly available information and would be refined during the due diligence process.

“CN is ideally positioned to combine with KCS to create a company with broader reach and greater scale, and to seamlessly connect more customers to rail hubs and ports in the U.S., Mexico and Canada," said JJ Ruest, president and chief executive officer of CN.

"CN and KCS have highly complementary networks with limited overlap that will enable them to accelerate growth in single-owner, single-operator, end-to-end service across North America.

"With safer service and better fuel efficiency on key routes from Mexico through the heartland of America, the result will be a safer, faster, cleaner and stronger railway.”

Said Robert Pace, CN Board Chair: “We firmly believe our proposal is far superior to KCS’ existing agreement with CP because it offers superior financial value over the immediate and long-term, a more complementary strategic fit, greater choice and efficiencies for customers and enhanced benefits for employees and local communities.

"We look forward to engaging constructively with KCS’ Board and all relevant stakeholders to deliver this superior transaction.”

*All figures in U.S. dollars, except where noted. All conversions between Canadian dollars and U.S. dollars are based on a 0.799 foreign exchange rate as of April 19, 2021. Where applicable, figures are based on CN and CP closing share prices on the NYSE of $118.13 and $365.37, respectively, as of April 19, 2021.

**The combination is expected to be accretive to CN’s Adjusted Diluted EPS, excluding incremental transaction-related amortization, in the first full year following CN’s acquisition of control of KCS, and is expected to generate double-digit accretion upon the full realization of synergies thereafter.


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