CN and Kansas City Southern said they have jointly filed a renewed motion to approve its voting trust with the Surface Transportation Board.
The filing outlines the case for approval of the voting trust to advance the CN-KCS merger. Officials contend the move will enhance competition, protect against premature control of KCS and safeguard KCS’ financial health.
“We believe our early commitment to eliminating the minimal rail overlap and to laying out the case for a CN-KCS combination should allow the STB to approve our voting trust,” JJ Ruest, president and chief executive officer of CN, said in a news release.
“A trust is an essential step so KCS shareholders can receive the full value of their shares while the STB considers our case for a combined, end-to-end rail network and the significant public benefits of connecting the continent,” Ruest added. “This combination will promote growth and compete with the trucking industry for long-haul movements. It offers more choice for rail customers, port operators, employees, stakeholders and communities.”
As part of the application, CN plans to divest KCS’s 70-mile line between New Orleans and Baton Rouge, less than 0.7 percent of the approximately 27,000 route miles the two companies operate. The move removes the overlap between the CN and KCS networks, which officials said helps address any competitive concerns.
“Combining KCS with CN is compelling for our customers, employees, shareholders and the local communities in which we operate,” Patrick J. Ottensmeyer, president and chief executive officer of KCS, said in a news release. “We urge the STB to fully consider the benefits of this combination, and to respect KCS’ judgment about its preferred merger partner, so that we can realize the tremendous public interest advantages of the CN-KCS partnership on behalf of our stakeholders, many of whom have expressed overwhelming support.”
