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May
26

Merger update: CN, KCS file with STB for voting trust approval

CN and Kansas City Southern today jointly filed with the Surface Transportation Board (STB) a renewed motion for approval of its voting trust that outlines the case for approval of the voting trust to advance the CN-KCS merger.

The filing highlights that the voting trust protects against premature control of KCS and protects KCS’ financial health, that CN remains financially sound, the substantial benefits to be gained from the transaction by customers and the nearly 1,100 stakeholders who have already supported the transaction.

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May
14

Merger mayhem: CN ups KCS offer; CP seeks to respond

Rail News Home Kansas City Southern 5/14/2021 Rail News: Kansas City Southern
CN has sweetened its offer to acquire Kansas City Southern. Under terms of its revised proposal, CN now would exchange each share of KCS common stock for $200 in cash and 1.129 shares of CN common stock, implying a total enterprise value of $33.6 billion.CN also has agreed to reimburse KCS $700 million in connection with a termination fee it would need to pay Canadian Pacific under their merger agreement if that deal is called off. As a result, KCS’ board has determined that CN’s revised proposal constitutes a “company superior proposal” as defined in KCS’s merger agreement with CP.KCS notified CP that it intends to terminate their merger agreement and enter into a definitive agreement with CN. CP retains the right to negotiate merger agreement amendments for at least five business days, and KCS’ board still could make a further determination as to whether any such amendments would cause the CN proposal to no longer constitute a company superior proposal.“We are delighted that KCS has deemed [our] binding proposal superior, recognizing the many compelling benefits of our combination and expressing confidence in CN’s ability to obtain the necessary approvals and successfully close the transaction,” said CN President and Chief Executive Officer JJ Ruest in a press release. “Our proposal offers a clear path to completion and is structured in a way that gives KCS shareholders both greater immediate value and the opportunity to participate in the future upside of the combined company.”CP plans to respond to KCS about any merger agreement amendments within the allotted time, CP officials said in a statement.It isn't surprising that CN would raise its offer, which highlights that railroad's recognition of the significant regulatory risks and challenges associated with "its anti-competitive bid,” CP officials said.“There is nothing new here; this doesn't make it any more likely that the CN proposal can close into a voting trust. The Surface Transportation Board already approved CP's use of a voting trust for its pro-competitive combination with KCS,” they said. “We believe that CP's negotiated agreement with KCS is the only true end-to-end Class I combination that is in the best interests of North American shippers and communities. As we've said repeatedly, we are not going to enter into a bidding war.”CP officials believe the mutually negotiated agreement with KCS represents compelling short- and long-term value for shareholders that’s actually achievable.

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May
13

KCS promotes Livingston to VP, urges shareholders to reject TRC offer

Rail News Home Kansas City Southern 5/13/2021 Rail News: Kansas City Southern
Kansas City Southern has promoted Timothy Livingston from general manager of network operations to vice president of transportation for the company’s operations in the United States and Mexico.Livingston joined KCS as a conductor in 2004 and has held transportation management positions in Arkansas, Louisiana, Texas, Oklahoma and Missouri before being promoted to GM of network operations."Throughout the evolution of KCS’ implementation of precision scheduled railroading, Tim has consistently demonstrated tremendous leadership," said KCS Executive VP of Operations John Orr in a press release. "He has a keen understanding of the value of a speak-up culture and operational balance, and how these elements lead to growth."Meanwhile, KCS earlier this week announced that it received notice of an unsolicited mini-tender offer by TRC Capital Investment Corp. to purchase up to 500,000 shares, or approximately 0.55%, of KCS’s outstanding common stock at a price of $285 per share in cash.As TRC Capital's own offer document acknowledges, the offering price is approximately 2.47% below the closing price per share of KCS on April 30, 2021, the last trading day before the mini-tender offer was commenced, KCS officials said.The officials also said the company does not endorse TRC Capital’s mini-tender offer and recommends that KCS shareholders reject the unsolicited offer and not tender their shares in response to the offer.Moreover, KCS recommends that any shareholders who have tendered shares to TRC Capital withdraw those shares by providing the written notice described in the offering documentation before the offer expires June 2.

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May
03

CP objects to CN using merger waiver that STB granted to CP-KCS deal

Rail News Home Kansas City Southern 5/3/2021 Rail News: Kansas City Southern
Canadian Pacific late last week filed a formal objection with the Surface Transportation Board (STB) stating that CN does not qualify for a waiver of the STB's rules for major transactions with respect to CN's proposal to acquire Kansas City Southern.In its letter, CP states that the CN-KCS transaction does not satisfy the criteria that the STB relied upon in finding that the waiver should apply to a CP-KCS transaction, which the STB granted on April 23.Meanwhile, in other developments:
• CN today issued an open letter to the KCS community regarding CN’s proposal to combine with KCS. The letter outlines why CN believes a combined CN-KCS represents the best solution for all stakeholders and sets the record straight on the merits of the proposal.
• CP today announced that more than 110 customers and other stakeholders have filed letters with the STB to express concerns about and/or opposition to CN’s proposal for KCS. The letters from customers and other stakeholders highlight growing concerns that the CN-KCS combination would reduce competition in the Canada-U.S.-Mexico corridor, CP officials said in a press release.
• CN late last week announced that more than 200 additional letters in favor of its proposed KCS combination have been filed with the STB, bringing the total number of support letters CN has received to more than 600 in just over a week since its proposal was made public. That number exceeds the number of letters that CP has received in over five weeks, CN officials said in a press release.

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Apr
19

KCS posts lower revenue in Q1, names Songer and Orr EVPs

Kansas City Southern last week reported first-quarter 2021 revenue of $706 million, down 4% from the same period a year ago.

Overall, carload volumes were down 1% compared with volumes in Q1 2020, KCS officials said in a press release.

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Sep
11

KCS rejects takeover bid, report says

Rail News Home Kansas City Southern 9/11/2020 Rail News: Kansas City Southern
Kansas City Southern has rejected a $20 billion takeover offer from an investor group, the Wall Street Journal reported Wednesday.Global Infrastructure Partners and the infrastructure arm of private-equity firm Blackstone Group Inc. offered KCS $208 a share, the paper reported, citing people familiar with the situation.KCS rejected the bid, arguing it undervalued the company. KCS turned away an earlier bid that was below $200 a share. The two sides are not in discussions, the paper reported.

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Sep
09

KCS Holiday Express train won't run in 2020

Rail News Home Kansas City Southern 9/9/2020 Rail News: Kansas City Southern
The KCS Holiday Express project's charitable component has raised more than $2.1 million over the past 19 years.Photo – Kansas City Southern

Kansas City Southern has canceled this year's Holiday Express train due to the pandemic, but the railroad will mark the charitable program's 20th year with a fundraiser to benefit The Salvation Army in 20 communities along the KCS network.

"While it is not safe to gather for free visits with Santa Claus and tours of the Holiday Express train this year, the need for the charitable component of this program is greater than ever," KCS President and Chief Executive officer Patrick Ottensmeyer said in a press release.

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Aug
21

Kansas City Southern earns recognition for logistics quality

Rail News Home Kansas City Southern 8/21/2020 Rail News: Kansas City Southern
Logistics Management magazine has presented a 2020 Quest for Quality award to Kansas City Southern, the Class I announced earlier this week.KCS earned recognition as this year's rail/intermodal service provider winner in the categories of on-time performance and customer service, and was tied for the top spot in equipment and operations.To determine award winners, the magazine's readers evaluate companies in all modes and service disciplines, choosing top performers in such categories as railroad and intermodal services. Transportation service providers are rated on five key criteria: on-time performance, value, information technology, customer service, and equipment and operations."A core part of the KCS vision is to be the most-customer focused transportation service provider in North America, so this validation from our customers is important," said KCS Executive Vice President and Chief Marketing Officer Mike Naatz in a press release.

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Aug
04

Report: Private-equity firms discuss bid for KCS

Rail News Home Kansas City Southern 8/4/2020 Rail News: Kansas City Southern
A consortium of private equity investors is considering a possible takeover bid for Kansas City Southern, the Wall Street Journal reported July 28.The newspaper reported that the Blackstone Group Inc. and Global Infrastructure Partners are exploring a potential buyout that could be worth more than $21 billion.The firms together are exploring a potential deal and speaking to banks, including Citigroup Inc., about financing, people familiar with the matter told the newspaper.The deal provides a bet on the increase in U.S.-Mexico trade, given that KCS' rail network operates in both countries, the paper reported.KCS was the subject of merger or acquisition rumors a month ago, Seeking Alpha reported.KCS President and Chief Executive Officer Patrick Ottensmeyer addressed the earlier media reports in response to a question during a July 17 conference call with analysts following the company's second-quarter financial report. Those media reports appeared to becoming out of Europe or London, Ottensmeyer said."Obviously, you know, the standard answer is no comment on things like that," Ottensmeyer said, according to a transcript of the call. "But the story behind that is that we've got a terrific plan, we've got outstanding opportunities, we have a lot of runway to have a successful run as a independent, standalone publicly traded company and that's our focus and that's what we're going to do." 

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Aug
03

Trump signs KCS permit for second international rail bridge in Laredo

Rail News Home Kansas City Southern 8/3/2020 Rail News: Kansas City Southern
The new structure will be a single-track span immediately adjacent to the existing U.S.-Mexico bridge in Laredo, Texas.Photo – KCS

President Donald Trump has approved a permit to allow Kansas City Southern to build an additional, parallel bridge span next to its existing international rail bridge in Laredo, Texas.

The Class I applied for the permit with the U.S. Department of State in March.

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Jul
07

KCS updates 2019 sustainability report

Rail News Home Kansas City Southern 7/7/2020 Rail News: Kansas City Southern
The railroad has updated its 2019 sustainability report entitled "For the Long Haul: Delivering Prosperity, Valuing People, Protecting the Planet."Photo – KCS

Kansas City Southern in late June released an update to its 2019 sustainability report.

Safety statistics shared annually in sustainability reports now will include data from KCS’ Mexican operations, the update states. Titled "For the Long Haul: Delivering Prosperity, Valuing People, Protecting the Planet,” the 2019 report now shows the Class I improved its consolidated reportable train accident frequency ratio by 26 percent and consolidated reportable injury frequency ratio by eight percent.

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Apr
06

KCS to hike train speed near Barksdale Air Force Base

Rail News Home Kansas City Southern 4/6/2020 Rail News: Kansas City Southern
Kansas City Southern will increase train speed from 20 mph to 49 mph on 1.8 miles of track between Benton Road Overpass and the west gate of Barksdale Air Force Base in Bossier City, Louisiana, by mid-May, the Class I announced late last week.The maximum speed will be raised incrementally, starting with 25 mph on April 12, followed by 30 mph on April 19; 35 mph on April 26; 40 mph on May 3; 45 mph on May 10; and 49 mph on May 17.The train speed increase on the track segment was made possible by the completion of a major track improvement project, KCS officials said in a press release. 

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Oct
30

KCS releases latest sustainability report

Rail News Home Kansas City Southern 10/30/2019 Rail News: Kansas City Southern
Kansas City Southern yesterday unveiled a report highlighting the Class I's sustainable business practices in 2018.Titled "For the Long Haul: Delivering Prosperity, Valuing People, Protecting the Planet,"  the report illustrates why sustainable practices are important to the company's business, said KCS President and Chief Executive officer Patrick Ottensmeyer in a press release."Responsible business practices are key to KCS' vision, values and culture, and to maintaining strong relationships with our stakeholders," Ottensmeyer said.The report follows the Global Reporting Initiative’s (GRI) latest standards for disclosing governance, economic, social and environmental topics. The GRI standards provide for the disclosure of measurable data and specific information related to sustainability, KCS officials said.According to the report, KCS last year:
• reduced its carbon footprint by reducing waste and energy usage through design and innovations, and decreased greenhouse gas emissions by utilizing fuel-reduction technologies and operational initiatives;
• diversified its workforce and optimized employee experiences via innovative technologies; and
• reduced reportable injuries and made operations more safe and secure, such as by reaching a goal to make all required route miles fully positive train control compliant.The Class I also began to implement precision scheduled railroading (PSR), laying the groundwork for what became in 2019 KCS’ PSR, which is helping the company realize significant efficiency and productivity improvements, the railroad’s officials said.

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Oct
18

KCS posts record Q3 revenue despite flat carload volume

Kansas City Southern logged record third-quarter 2019 revenue of $747.7 million, a 7 percent increase over the same quarter a year ago, the Class I announced today.

The railroad was helped by a 21 percent increase in refined fuel shipments to Mexico, as well as cost-cutting efforts. Overall, carload volumes were flat in the quarter compared with last year, KCS officials said in a press release.

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Sep
25

KCS promotes Flores to VP of auto sales, marketing

Rail News Home Kansas City Southern 9/25/2019 Rail News: Kansas City Southern
Kansas City Southern announced this week that Rodrigo Flores has been promoted from assistant vice president to vice president of automotive sales and marketing.He will be responsible for the road’s automotive business unit in the United States and will coordinate with the sales and marketing team at Kansas City Southern de Mexico (KCSM). “Rodrigo is a talented sales, marketing and finance professional, who over the past three years has forged strong relationships with KCS’ automotive customers in the U.S. and Mexico,” said Michael Naatz, KCS executive VP and chief marketing officer, in a press release.Flores' experience makes him ideal for his new position "and ensures a smooth transition for customers and the team he leads," Naatz added.Flores joined the predecessor to KCSM in 1997 as a manager in external reporting. In 2000, he joined KCSM’s treasury department as director, where he served until 2006 when he accepted a position as AVP and assistant treasurer at KCS corporate headquarters in Kansas City, Missouri.Flores transitioned from treasury and into sales and marketing as assistant vice president of the automotive business unit where he has served since 2016.In his new role, Flores succeeds Kelley Anderson, who has retired.“We are grateful to Kelley for his leadership and for sharing his transportation expertise with KCS over the past eight years,” Naatz said. “He has had a fantastic 40-year career and we wish him and his family the very best for a long and healthy retirement.”

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Aug
21

Kansas City Southern posts 2019 Holiday Express train schedule

Rail News Home Kansas City Southern 8/21/2019 Rail News: Kansas City Southern
The six-car festive train will depart Nov. 27 from Shreveport, Louisiana.Photo – Kansas City Southern

It still may be summer, but it's not too early for Kansas City Southern to roll out the 2019 schedule for its 19th annual Holiday Express train.

The six-car festive train will depart Nov. 27 from Shreveport, Louisiana, on this year's tour, which will stop in 20 communities in five U.S. states on 25 dates. The route will end Dec. 22 at Union Station in Kansas City, Missouri.

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Jul
19

Kansas City Southern posts record Q2 results

Kansas City Southern today reported record second-quarter revenue of $714 million, a 5 percent increase on flat volumes compared with the previous year's same quarter.

Year-over-year revenue growth for the quarter was led by a 19 percent increase in chemicals and petroleum shipments, particularly to Mexico, as well as a 5 percent increase in automotive, KCS officials said in a press release.

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Jul
09

Kansas City Southern employs PSR to improve service performance, forge a traffic-growth foothold

The new mantra "service begets growth" was developed by KCS to emphasize the correlation between optimal operational performance and accelerated business generation. Senior execs believe a fluid and resilient railroad is much better positioned to capitalize on traffic-growth opportunities.Photo – Kansas City Southern

By This email address is being protected from spambots. You need JavaScript enabled to view it., Managing Editor

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Jun
13

BMW opens KCSM-served plant in Mexico

Rail News Home Kansas City Southern 6/13/2019 Rail News: Kansas City Southern
KCSM operates more than 2,000 miles of track in Mexico, where it expects to serve 14 automotive plants by next year.Photo – Kansas City Southern

BMW Group and Mexican government officials last week marked the opening of the automaker's new plant in San Luis Potosi, Mexico.

To be served by Kansas City Southern de Mexico (KCSM), the more than $1 billion plant is designed to produce up to 175,000 vehicles annually. The facility will be used to produce the BMW 3 Series Sedan, the company's most successful model series, BMW Group officials said in a press release.

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Jun
10

From the editor: Ottensmeyer to receive 2019 Railroad Innovator Award

By This email address is being protected from spambots. You need JavaScript enabled to view it., Editor

Progressive Railroading and RailTrends® have named Kansas City Southern President and Chief Executive Officer Patrick Ottensmeyer the 2019 recipient of the Railroad Innovator Award, which recognizes an individual’s outstanding achievement in the rail industry. KCS’s president since 2015 and CEO since 2016, Ottensmeyer has helmed the railroad during a pivotal stretch in its history.

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