Kansas City Southern has been offered another bid, this time from Canadian National Railway with a cash-and-stock offer valued at $33.7 billion.
The offer amount outdoes competing bidder Canadian Pacific’s cash-and-stock proposal of $25 billion.
Any deal would capitalize on growing trade across North America by creating the first railroad that would link the United States, Mexico and Canada.
Shares of Kansas City Southern jumped nearly 16% by midday Tuesday. CN’s stock fell 6%. Canadian Pacific’s shares slipped 2%
CN said its offer is worth $325 per Kansas City Southern share. Kansas City Southern shareholders would receive $200 in cash and 1.059 shares of CN common stock for each share. The transaction would include about $3.8 billion in Kansas City Southern debt. If the two companies were to combine, it would create a business connecting ports and rails in the U.S., Mexico and Canada.
In contrast, Canadian Pacific said its proposed deal would create a combined company that would operate about 20,000 miles of railway, employ 20,000 people and generate annual revenue of about $8.7 billion.