The boards of Kansas City Southern and Canadian National railways have both unanimously approved an agreement to merge the two companies, one week after KCS broke off a previous agreement with a rival firm. As announced last week, the $33.6 billion deal will combine CN with KCS, establishing the first rail company to operate in the U.S., Canada and Mexico. Kansas City Southern president and CEO Patrick Ottensmeyer said in a joint release that the two companies’ cultures are strongly aligned, and they share a commitment to environmental stewardship, safe operations, reliable service, and outstanding performance. Pending approval by the U.S. Surface Transportation Board, Canadian National will establish its voting trust later this year to assume control of KCS. Montréal-based CN will also move its American base of operations to Kansas City.
The deal comes a week after Kansas City Southern deemed CN’s bid as superior to the agreement they had struck in March with Canadian Pacific Railway. The Calgary-based railway said in a release Friday morning that despite KCS terminating the $25 billion agreement, they would still submit their proposal to the Surface Transportation Board, arguing that their takeover plan would ensure greater competition among Class One railroads.