Support Grows for CP+KCS as DOJ Affirms Anticompetitive Concerns with CN Proposal

Canadian Pacific Railway Limited (“CP”) announced that more than 130 additional stakeholders have filed statements with the Surface Transportation Board (“STB”) supporting CP’s planned, friendly merger with Kansas City Southern (“KCS”), bringing the total submitted to date to more than 680. There are also more than 110 letters filed with the STB expressing concern about the Canadian National (“CN”) proposal.

The letters highlight that a combined CP and KCS would, among other benefits, invigorate transportation competition, expand access to existing and growing markets and provide new service offerings that would improve transit times and reliability along the Canada-U.S.-Mexico corridor.

Last Friday, the Department of Justice (“DOJ”) filed comments with the STB objecting to CN’s proposed use of a voting trust on the grounds that a CN merger with KCS would pose greater risks to competition than the CP-KCS agreement.

The DOJ’s position is consistent with CP’s assessment that CN’s proposal is illusory and offers unattainable value to KCS’ shareholders.

CP remains confident its friendly agreement with KCS is superior to the CN proposal because CP+KCS is the only viable Class 1 merger, as validated by two favorable rulings by the STB. The STB has approved CP’s use of a voting trust and affirmed KCS’ waiver from the new rail merger rules it adopted in 2001 because a CP-KCS combination is truly end-to-end, pro-competitive and together they would remain the smallest Class 1 railway.

CP is seeking approval from the STB for the combination, which also remains subject to the approvals of CP and KCS shareholders and other customary closing conditions. The STB review is expected to be completed by the middle of 2022.

For more information on the transaction and the benefits it is expected to bring to the full range of stakeholders, visit FutureForFreight.com.

About Canadian Pacific

Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP. CP-IR

About KCS

Headquartered in Kansas City, Mo., Kansas City Southern (KCS) (NYSE: KSU) is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS’ North American rail holdings and strategic alliances are primary components of a railway network, linking the commercial and industrial centers of the U.S., Mexico and Canada. More information about KCS can be found at www.kcsouthern.com.

Source: Canadian Pacific Railway Limited