Canadian National Pledges Divestiture to Win Kansas City Southern Merger Approval
Canadian National Railway (NYSE: CNI) pledged to sell a 70-mile rail line connecting New Orleans and Baton Rouge as part of its antitrust application to acquire Kansas City Southern (NYSE: KSU).
Last week, Canadian National (CN) sealed a $33 billion deal to acquire Kansas City Southern (KCS), besting rival Canadian Pacific Railway (NYSE: CP). But the deal is far from done, with CN likely to face significant scrutiny from both the U.S. Surface Transportation Board (STB) and the Department of Justice.
On Wednesday, the two railroads filed an application with the STB to permit a voting trust that would allow KCS shareholders to get paid prior to the deal winning regulatory approval, a move that would eliminate much of the risk for those shareholders. As part of the application, CN committed to divesting KCS's 70-mile line in Louisiana. In a statement, CN called the line "the sole area of overlap" between the two railroads' networks.
Source Fool.com
