CN launches battle for Kansas City rail

Canadian National said on Tuesday it had offered to buy railroad operator Kansas City Southern for about US$30 billion, trumping a rival bid by Canadian Pacific and sending the U.S. company’s shares up more than 20 per cent.

Either combination will create the largest North American railways, spanning across the United States, Mexico and Canada, by transaction value.

The offers come amid a recovery in supply chains that were disrupted by the COVID-19 pandemic, and follow the ratification of the US-Mexico-Canada Agreement last year that removed the threat of trade tensions which had escalated under former U.S. President Donald Trump.

Canadian National’s offer of US$325 per share, including US$200 in cash and 1.059 shares, represents a premium of 26.8 per cent to Kansas City Southern’s last close on Monday.

Last month, Canadian Pacific had agreed to buy Kansas City Southern in a US$25-billion cash-andstock deal, valuing U.S. firm at US$275 per share.