CN & BNSF Explain Merger Benefits
January 18, 2000
Following a merger agreement late last year, Canadian National Railway Company and Burlington Northern Santa Fe Corporation recently outlined how the combined businesses would become more efficient.
The companies expect the merger will:
* Create an extensive, efficient single-line network across Canada and the central and western United States that will deliver faster, more reliable service and better information to customers.
* Establish new single-line north-south traffic routes that will provide more direct and efficient lanes that bypass congested areas, open new markets to shippers and their customers, and move products efficiently between Canada and the U.S.
* Create truck-competitive service in key corridors that is expected to give shippers viable alternatives to high trucking costs, reducing truck traffic on highways.
* Be low risk and stand apart from certain recent rail consolidations. The combination will not eliminate a parallel competitor, divide an existing railroad or cut key personnel.
Combined, CN and BNSF would currently operate about 50,000 route-miles of track, employ about 67,000 people and have combined revenue of approximately US$12.5 billion (Cdn$18.5 billion).
The combination is subject to, among other things, approval by the shareholders of both companies, as well as to customary regulatory approvals. CN will proceed with a Plan of Arrangement that will be submitted to the Quebec Superior Court to confirm that the combination is fair to CN shareholders. The combination will also be subject to approval by the United States Surface Transportation Board. The companies expect that all required regulatory approvals can be obtained and the transaction completed by mid-2001.
Through its subsidiary, The Burlington Northern and Santa Fe Railway Company, BNSF, headquartered in Forth Worth, Texas, operates one of the largest rail networks in North America, with 33,500 route miles of track covering 28 states and two Canadian provinces.
Canadian National Railway Company spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.