Kansas City Southern Board of Directors Determines Proposal from Canadian National Railway Could Reasonably Be Expected to Lead to a “Superior Proposal”

Kansas City Southern (NYSE: KSU) (“KCS”) today announced that its Board of Directors has unanimously determined, after consultation with the Company’s outside legal and financial advisors, that the unsolicited proposal received from Canadian National Railway (TSX: CNR, NYSE: CNI) (“CN”) on April 20, 2021 to acquire KCS in a cash and stock transaction valued by CN at $325 per KCS share could reasonably be expected to lead to a “Company Superior Proposal” as defined in KCS’s merger agreement with Canadian Pacific Railway Limited (TSX: CP, NYSE: CP) (“CP”).

KCS intends to provide CN with nonpublic information and to engage in discussions and negotiations with CN with respect to CN’s proposal, subject in each case to the requirements of the CP merger agreement.

KCS remains bound by the terms of the CP merger agreement, and KCS’s Board has not determined that CN’s proposal in fact constitutes a Company Superior Proposal as defined in the merger agreement with CP. In addition, KCS notes that there can be no assurance that the discussions with CN will result in a transaction.

As previously announced on March 21, 2021, KCS entered into a merger agreement with CP, pursuant to which CP agreed to acquire KCS in a stock and cash transaction valued at $275 per KCS share based on the CP and KCS closing prices on March 19, 2021.

‎BofA Securities and Morgan Stanley & Co. LLC are serving as financial advisors to Kansas City Southern. Wachtell, Lipton, Rosen & Katz, Baker & Miller PLLC, Davies Ward Phillips & Vineberg LLP, WilmerHale, and White & Case, S.C. are serving as legal counsel to Kansas City Southern.

About Kansas City Southern

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 with other North American rail partners are primary components of a unique railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada. More information about KCS can be found at www.kcsouthern.com