Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC), CSX
Corporation (NASDAQ: CSX) (CSX) and Genesee & Wyoming Inc.
(G&W) today announced they have reached agreements that when
completed will create a new direct CPKC-CSX interchange connection
in Alabama.
As part of the series of proposed transactions, CPKC and CSX
would each acquire or operate portions of Meridian & Bigbee
Railroad, L.L.C. (MNBR), a G&W-owned railway in Mississippi and
Alabama, to establish a new freight corridor for shippers that
connects Mexico, Texas and the U.S. Southeast.
“This strategic acquisition will bring more shipping options to
intermodal, automotive and other customers by providing a new,
efficient corridor connecting expanding markets in Mexico, Texas
and the U.S. Southeast,” said Keith Creel, CPKC President and Chief
Executive Officer. “With this new east-west connection taking
advantage of each railway's routes and service, we can extend our
reach converting more freight traffic to rail and off our
highways.”
“CSX is excited to establish this new interchange connection
with CPKC, which provides shippers with a compelling transportation
option with access to markets in Texas and Mexico as well as into
the heart of the thriving and dynamic U.S. Southeast,” said Joe
Hinrichs, President and Chief Executive Officer of CSX. “This new
service is a demonstration of our commitment to creating product
offerings for shippers that help them leverage the efficiency and
sustainability advantages of rail to drive growth.”
“We are pleased to have entered into agreements with CSX and
CPKC that will enable MNBR to continue providing customers with
outstanding short line service from Linden, Alabama, to Meridian,
Mississippi, while enabling our Class I partners to create a new
connection into the Southeast U.S.,” said Jack Hellmann, G&W
CEO. “At the same time, we have enhanced several agreements related
to other G&W short line railroads and are collaborating on the
expansion of our service to Alberta and the Alberta Industrial
Heartland in conjunction with CPKC.”
The MNBR runs between Meridian, Miss. and Montgomery, Ala., and
currently is operated under a combination of ownership and
operating agreements.
Under the agreements announced today, CPKC would acquire and
operate the segment of the MNBR between Meridian and Myrtlewood,
Ala. and CSX would operate the lines currently leased by MNBR east
of Myrtlewood. As a result, CPKC and CSX would establish a direct
CPKC-CSX interchange at or near Myrtlewood, Ala. In exchange,
G&W would acquire certain Canadian properties owned by CPKC and
other rights. MNBR would receive rights to continue to provide
local service to existing customers on former MNBR-owned lines and
connect with other railroads without interchange restrictions.
Terms of the transactions were not disclosed and will be
addressed in definitive agreements that the parties have agreed to
negotiate. Certain portions of the transactions are subject to
regulatory review and approval from, or exemption by, the U.S.
Surface Transportation Board.
Forward-looking information This news release
contains certain forward-looking information and forward-looking
statements (collectively, "forward-looking information") within the
meaning of applicable securities laws in both the U.S. and Canada.
Forward-looking information includes, but is not limited to,
statements concerning the parties’ expectations, beliefs, plans,
goals, objectives, assumptions and statements about possible future
events, conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as “financial expectations”, “key assumptions”,
“will”, “anticipate”, “believe”, “expect”, “plan”, “should”,
“commit”, “outlook”, “guidance” or similar words suggesting future
outcomes.
This news release contains forward-looking information relating,
but not limited, to agreements between CPKC and CSX, between CPKC
and G&W and between G&W and CSX to create a new direct
interchange connection in Alabama, the anticipated impact of the
agreements on available shipping options for customers, the effects
of the agreements on access to markets in Texas, Mexico and the
southeast U.S., the negotiation of definitive agreements among the
parties, plans and expectations regarding the integration of a
CPKC-CSX interchange, and other related matters associated with the
changes in ownership and/or control, and operation of segments of
the MNBR and assumptions underlying or relating to any of the
foregoing.
The forward-looking information contained in this news release
is based on the parties’ current expectations, estimates,
projections and assumptions, having regard to the parties’
experience and the parties’ perception of historical trends, and
includes, but is not limited to, expectations, estimates,
projections and assumptions relating to: changes in business
strategies; the fuel efficiency of railways and the parties’
operations; the impacts of existing and planned capital
investments; North American and global economic growth; commodity
demand growth; sustainable industrial and agricultural production;
commodity prices and interest rates; performance of the parties’
assets and equipment; sufficiency of the parties’ budgeted capital
expenditures in carrying out the parties’ business plans;
geopolitical conditions; applicable laws, regulations and
government policies; the availability and cost of labour services
and infrastructure; the satisfaction by third parties of their
obligations to the parties; carbon markets, evolving sustainability
strategies, and scientific or technological developments; and
capital investments by third parties. Although the parties believe
the expectations, estimates, projections and assumptions reflected
in the forward-looking information presented herein are reasonable
as of the date hereof, there can be no assurance that they will
prove to be correct. Current conditions, economic and otherwise,
render assumptions, although reasonable when made, subject to
greater uncertainty.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from those
expressed or implied by forward-looking information. By its nature,
CPKC's forward-looking information involves inherent risks and
uncertainties that could cause actual results to differ materially
from the forward looking information, including, but not limited
to, the following factors: changes in business strategies and
strategic opportunities; general Canadian, U.S., Mexican and global
social, economic, political, credit and business conditions; risks
associated with agricultural production such as weather conditions
and insect populations; the availability and price of energy
commodities; the effects of competition and pricing pressures,
including competition from other rail carriers, trucking companies
and maritime shippers in Canada, the U.S. and Mexico; North
American and global economic growth and conditions; industry
capacity; shifts in market demand; changes in commodity prices and
commodity demand; uncertainty surrounding timing and volumes of
commodities being shipped via CPKC; inflation; geopolitical
instability; changes in laws, regulations and government policies,
including regulation of rates; changes in taxes and tax rates;
potential increases in maintenance and operating costs; changes in
fuel prices; disruption in fuel supplies; uncertainties of
investigations, proceedings or other types of claims and
litigation; compliance with environmental regulations; labour
disputes; changes in labour costs and labour difficulties; risks
and liabilities arising from derailments; transportation of
dangerous goods; timing of completion of capital and maintenance
projects; sufficiency of budgeted capital expenditures in carrying
out business plans; services and infrastructure; the satisfaction
by third parties of their obligations; currency and interest rate
fluctuations; exchange rates; effects of changes in market
conditions and discount rates on the financial position of pension
plans and investments; trade restrictions or other changes to
international trade arrangements; the effects of current and future
multinational trade agreements on the level of trade among Canada,
the U.S. and Mexico; climate change and the market and regulatory
responses to climate change; anticipated in-service dates; success
of hedging activities; operational performance and reliability;
customer and other stakeholder approvals and support; regulatory
and legislative decisions and actions; the adverse impact of any
termination or revocation by the Mexican government of Kansas City
Southern de México, S.A. de C.V.'s Concession; public opinion;
various events that could disrupt operations, including severe
weather, such as droughts, floods, avalanches and earthquakes, and
cybersecurity attacks, as well as security threats and governmental
response to them, and technological changes; acts of terrorism, war
or other acts of violence or crime or risk of such activities;
insurance coverage limitations; material adverse changes in
economic and industry conditions, including the availability of
short and long-term financing; the pandemic created by the outbreak
of COVID-19 and its variants and resulting effects on economic
conditions, the demand environment for logistics requirements and
energy prices, restrictions imposed by public health authorities or
governments, fiscal and monetary policy responses by governments
and financial institutions, and disruptions to global supply
chains; the realization of anticipated benefits and synergies of
the Canadian Pacific Railway Limited (CP) - Kansas City Southern
(KCS) transaction and the timing thereof; the satisfaction of the
conditions imposed by the U.S. Surface Transportation Board in its
March 15, 2023 final decision; the success of integration plans for
KCS; the focus of management time and attention on the CP-KCS
transaction and other disruptions arising from the CP-KCS
integration; estimated future dividends; financial strength and
flexibility; debt and equity market conditions, including the
ability to access capital markets on favourable terms or at all;
cost of debt and equity capital; improvement in data collection and
measuring systems; industry-driven changes to methodologies; and
the ability of the management of CPKC to execute key priorities,
including those in connection with the CP-KCS transaction. The
foregoing list of factors is not exhaustive. These and other
factors are detailed from time to time in reports filed by CPKC
with securities regulators in Canada and the United States.
Reference should be made to "Item 1A - Risk Factors" and "Item 7 -
Management's Discussion and Analysis of Financial Condition and
Results of Operations - Forward-Looking Statements" in CPKC's
annual and interim reports on Form 10-K and 10-Q.
About CPKCWith its global headquarters in
Calgary, Alta., Canada, CPKC is the first and only single-line
transnational railway linking Canada, the United States and México,
with unrivaled access to major ports from Vancouver to Atlantic
Canada to the Gulf of México to Lázaro Cárdenas, México. Stretching
approximately 20,000 route miles and employing 20,000 railroaders,
CPKC provides North American customers unparalleled rail service
and network reach to key markets across the continent. CPKC is
growing with its customers, offering a suite of freight
transportation services, logistics solutions and supply chain
expertise. Visit cpkcr.com to learn more about the rail advantages
of CPKC. CP-IR
About CSXCSX, based in Jacksonville, Florida,
is a premier transportation company. It provides rail, intermodal
and rail-to-truck transload services and solutions to customers
across a broad array of markets, including energy, industrial,
construction, agricultural and consumer products. For nearly 200
years, CSX has played a critical role in the nation’s economic
expansion and industrial development. Its network connects every
major metropolitan area in the eastern United States, where nearly
two-thirds of the nation’s population resides. It also links more
than 230 short-line railroads and more than 70 ocean, river and
lake ports with major population centers and farming towns alike.
More information about CSX Corp. and its subsidiaries is available
at www.csx.com.
About Genesee & WyomingG&W owns or
leases 115 freight railroads with 7,300 employees serving 3,000
customers. The company’s North American operations include 110
short line and regional railroads that serve 43 U.S. states and
four Canadian provinces over more than 13,000 track-miles. G&W
subsidiaries and joint ventures also provide rail service at more
than 30 major ports, rail-ferry service between the U.S. Southeast
and Mexico, transload services, and industrial railcar switching
and repair. G&W is owned by Brookfield Infrastructure Partners,
L.P. and GIC.
Contacts:MediaCPKCmediarelations@cpkcr.com
CSXBryan Tucker 855-955-6397
G&WTom Ciuba(203) 202-8926Tom.Ciuba@gwrr.com
Investment CommunityCPKCChris De Bruyn
403-319-3591investor@cpkcr.com
CSXMatthew Korn904-366-4515
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