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Rail News Home Canadian National Railway - CN 4/23/2021 Rail News: Canadian National Railway - CN
CN announced yesterday it has written to Kansas City Southern’s board outlining the Canadian railroad’s "superior proposal" to acquire KCS in a cash-and-stock transaction valued at $33.7 billion, or $325 per share.And today, CN filed a letter with the Surface Transportation Board, detailing why its proposal is pro-competition and in the best interests of customers. The letter also seeks to correct what the Class I characterizes as "misleading statements" by rival Canadian Pacific, which last month announced it had reached an acquisition and merger agreement with KCS.In his April 22 letter to the KCS board, CN President and Chief Executive Officer JJ Ruest said his company’s proposal represents more than $50 per common share of incremental value than CP’s offer. He described CP’s response to the CN proposal as a distraction and an attack with “inaccurate and unfounded assertions.""As you know, the railroad regulatory approval condition that is relevant to the KCS shareholders is approval of the voting trust, and CN is proposing to use the identical voting trust that CP has proposed," Ruest wrote. "CN is confident that the Surface Transportation Board will not subject CN’s proposal to any different standard or scrutiny in approving the voting trust than would be applicable to CP’s proposal. Both voting trusts are equally likely to be approved. CP’s deliberately misleading claims to the contrary are not correct."CN’s proposed merger with KCS is in the public interest and will enhance competition, he added."Following the closing of the voting trust, CN is confident that it will be able to effectively address any reasonable remediation concerns and ensure that rail customers and other stakeholders benefit from the proposed combination with KCS," Ruest’s letter stated. "We look forward to sharing our views on these matters with you and your team."KCS officials have said the board will evaluate CN’s proposal in accordance with the terms of the KCS merger agreement with CP and respond "in due course."

Rail News Home Union Pacific Railroad 4/22/2021 Rail News: Union Pacific Railroad
Union Pacific Corp. today reported first-quarter 2021 net income of $1.3 billion, or $2 per diluted share, compared with $1.5 billion, or $2.15 per diluted share, during the same period a year ago.The Class I’s operating revenue of $5 billion declined 4% during the quarter. Business volumes, as measured by total revenue carloads, fell 1% compared to Q1 2020 due to declines in industrial and bulk shipments, partially offset by strength in premium carloads.The quarter presented "some real challenges that impacted our results," said Lance Fritz, UP's chairman, president and chief executive officer."We generated solid productivity through efficient use of our resources despite the significant weather event that covered most of our network in February and early March," Fritz said in a press release. "Looking to the rest of the year, an improving economic outlook, our continued commitment to value based pricing that exceeds inflation and the opportunity for strong productivity give us confidence to affirm our 2021 guidance."UP reported a Q1 operating ratio of 60.1%, up from 59% last year. The increase was attributed to weather and rising fuel prices.Quarterly freight revenue declined 5%, as core pricing gains were more than offset by a less favorable business mix, decreased fuel surcharge revenue and volume declines.Also during the quarter, UP's “service product and lower cost structure” attracted new business and growth opportunities, Fritz said."There are many more growth opportunities to capture by also helping our customers efficiently and reliably reduce the carbon intensity of their supply chains," he said.