CN Submits Notice of Intent to File Responsive Application with the Surface Transportation Board
Requests STB to condition any approval of a CP-KCS merger on the divestiture of KCS Springfield Line to CN, connecting Kansas City, Missouri to Springfield, Illinois
CN to invest at least US$250 million, which will promote competition while creating substantial environmental benefits by taking trucks off the road
MONTREAL, Jan. 13, 2022 (GLOBE NEWSWIRE) -- CN (TSX: CNR, NYSE: CNI) yesterday evening submitted a notice of intent to file a responsive application on February 28, 2022, with the Surface Transportation Board (“STB”) in accordance with the STB’s procedural schedule for review of the pending Canadian Pacific (“CP”) and Kansas City Southern (“KCS”) merger (collectively “CP-KCS”).
CN’s responsive application will ask the STB to condition any approval of a CP-KCS merger on the divestiture of KCS lines from Kansas City, Missouri to Springfield and East St. Louis, Illinois (the “Springfield Line”) to CN, pursuant to the STB’s statutory authority to order “the divestiture of parallel tracks” as a merger condition.
The Springfield Line is a direct competitive alternative to CP’s route from Kansas City to Chicago, and beyond to Detroit and eastern Canada. CP and KCS have made it clear in their merger application that they plan no investment on the Springfield Line, and instead will de-emphasize it in favor of CP’s existing parallel line.
Putting the Springfield Line under CN’s control represents a major opportunity to improve transportation options, promote rail-to-rail competition, and take many of thousands of long-haul trucks off the road annually through increased rail-to-truck competition. CN’s plan for the line will benefit all stakeholders and will advance CN’s continual efforts to ensure competition and choice in our industry, while also creating new jobs and economic opportunities in the region.
Specifically, with the Springfield Line, CN will:
- Make investments of at least US$250 million in the Kansas City, Missouri to Springfield and East St. Louis, Illinois line, including terminal upgrades;
- Take many thousands of trucks off the road, reducing congestion and emissions;
- Promote competitive options for customers, including automotive and intermodal traffic, which will lead to increased economic prosperity for the Midwest in line with the goals of President Biden’s executive order on competition;
- Open new international markets to customers, including safely and reliably linking Illinois, Indiana and Michigan manufacturers and farmers to the world; and,
- Preserve all existing competitive options by providing KCS access to customers on the line.
Under CN’s proposal, CN would make necessary capital investments to improve operating speed and terminals, yield environmental benefits, and provide additional pro-competitive options and access for auto and intermodal customers.
CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. As the only railroad connecting Canada’s Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.
Certain statements included in this news release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. By their nature, forward-looking statements involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as “believes,” “expects,” “anticipates,” “assumes,” “outlook,” “plans,” “targets,” or other similar words.
Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause the actual results or performance of the Company to be materially different from the outlook or any future results or performance implied by such statements. Reference should be made to Management’s Discussion and Analysis in CN’s annual and interim reports, Annual Information Form and Form 40-F, filed with Canadian and U.S. securities regulators and available on CN’s website, for a description of major risk factors.
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