Surface Transportation Board Sets Schedule for Review of Voting Trust Related to CN’s Pro-Competitive Combination With KCS

CN (TSX: CNR) (NYSE: CNI) and Kansas City Southern (NYSE: KSU) (“KCS”) today issued the following statement in response to the Surface Transportation Board’s (“STB”) decision to issue a timetable for reviewing the voting trust in connection with the companies’ definitive merger agreement:

We are happy with the timetable that the STB has set for reviewing our voting trust, marking another important step on the path to creating the premier railway for the 21^st century. We look forward to the STB’s review and we are confident that our voting trust will be approved.

The plain vanilla voting trust, which is identical to the CP trust approved for use by the STB, is an integral component of the CN-KCS combination. It prevents premature control of KCS, allows KCS to maintain independence and protects KCS’ financial health during the STB’s review of the ultimate combination of CN and KCS. It also enables KCS shareholders to realize the full value of their shares without the delay related to this review.

As CN and KCS explained in their May 26, 2021, motion for voting trust approval, the CN-KCS combination offers multiple public interest benefits, including seamless single-owner, single-operator service, new and faster routes, significant environmental protections and increased supply chain efficiency. Specifically, through the creation of this true end-to-end merger, CN and KCS will:

• Facilitate coordinated investment into new single-line routes and will eliminate delays associated with interchanges;
• Reduce cycle and transit times while also providing for more reliable and timely service for customers;
• Offer more cost-effective access to Southern markets in the United States and Mexico, accelerating USMCA’s economic benefits; and
• Provide significant environmental benefits by reducing the amount of long-haul trucking traffic on the road in six major shipper market segments.

The proposed combination creates an end-to-end merger and provides no risk to competition. Customers will not lose any existing routing options because CN and KCS are committed to preserving access to all existing gateways to enhance route choices and to ensure robust price competition. This is underscored by the overwhelming support we continue to receive from customers and other stakeholders. We have received more than 1,400 letters of support filed to date, highlighting advantages such as improved service, more shipping options and greater efficiency. 293 of the latest support letters filed on June 2, 2021 cite specific support for use of the voting trust.