A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway.
The bid trumps a $25 billion cash-and-stock proposal made by Canadian Pacific last month.
Any deal would capitalize on growing trade across North America by creating the first railroad that would link the United States, Mexico and Canada. Last year the three countries entered into a revamped regional trade pact, negotiated by President Donald Trump, that is expected to encourage trade and investment across North America.
A surge in manufacturing is already benefiting the companies. According to a research report Monday from Stifel, the six major railroad all reported double-digit increases in volume over the past week compared with a year earlier with strength in nearly every segment.
“These strong volumes, when coupled with other data points such as the ISM, should bode well for the economy,” analyst Benjamin Nolan wrote.
Source: Associated Press – MICHELLE CHAPMAN