Canadian National Railway is making a $33.7 billion cash-and-stock offer for the Kansas City Southern. The bid is higher than a $25 billion cash-and-stock proposal made by Canadian Pacific last month.
Any deal would create the first railroad that would link the United States, Mexico and Canada. Last year the three countries entered into a revamped regional trade pact that is expected to encourage trade and investment across North America.
A surge in manufacturing is already benefitting the companies. According to a research report Monday from Stifel, the six major railroads all reported double-digit increases in volume over the past week compared with a year earlier when the coronavirus pandemic cut shipping volume sharply.
“CN and Kansas City Southern 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,” CN President and CEO JJ Ruest said in a statement.
Badger Mining stated, “40 years of working hand-in-hand with CN has shown them to be an incredible partner. Their commitment to safety, service and innovation is second to none and we could not be happier with their proposal to acquire Kansas City Southern.”