Canadian National’s offer assigns an enterprise value of $33.7 billion to Kansas City Southern. The proposal of a $325 per share buyout represents a 27% premium to Kansas City Southern’s close on Monday.
“Together, CN and KCS will create the premier railway for the 21st century, seamlessly connecting ports and rails in the United States, Mexico and Canada,” Canadian National said of the proposed deal. Canadian National expects to realize annual EBITDA synergies of $1 billion.
Under Canadian National’s proposed deal, Kansas City Southern shareholders would receive $200 in cash per share, along with 1.059 shares of Canadian National. The deal represents a 21% improvement over the deal offered by Canadian Pacific.
As Kansas City Southern weighs the competing offers, shares of Canadian National fell by as much as 8%, while Canadian Pacific fell by 1% in Tuesday trades.