CN Rail (CNR) vs CP Rail, and the Merger with Kansas City Southern

The contest for Kansas City Southern is the newest chapter in the ongoing rivalry between Canadian National Railway (CNR/CNI) and Canadian Pacific Railway (CP.) In this video, we'll look at the interconnected histories of CN and CP Rail, review what happened with each company's respective bids for KCS, and examine what needs to happen for the KCS merger to go through - and what might happen if the deal goes off-track.
#CNRail #CPRail #CanadianInvesting
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Timestamps:
0:00 Introduction
0:54 Why do Canadian National Railway and Canadian Pacific Railway want to merge with Kansas City Southern?
1:28 Disclosure
2:02 SEGMENT 1: The History Between CN and CP
2:31 Canadian Pacific Railway built the first railway in Canada back in 1881
2:47 How Canadian National Railway was formed in 1919
3:22 CP and CN also competed against one another in these completely different industries!
3:46 The lead up to CN's privatization
4:16 CN and CP join the TSX
4:35 CN CEO Hunter Harrison implements Precision Scheduled Railroading
5:05 How Hunter Harrison was recruited to CP and turned the company around
5:53 Hunter Harrison recruits Keith Creel to CP from CN
6:04 CP attempts to merge with two other U.S. railways
6:15 Keith Creel becomes CEO of Canadian Pacific Railway
6:25 SEGMENT 2: Flipping the Packets on CNR/CNI and CP
6:39 CN and CP trade on the TSX and NYSE
6:57 Sector and Industry
7:05 Years Founded
7:13 Market Caps
7:22 Headquarters
7:44 Dividend Facts: Dividend Amount, Pay Schedule, DRIP/SPP and Years of Consecutive Dividend Increases
8:36 INTERMISSION: Please plant a Like to help this video and channel grow!
9:06 SEGMENT 3: CN and CP's Contest for Kansas City Southern
9:26 The unique advantage KCS holds over other North American competitors
9:40 March 2021: Canadian Pacific announces a merger with KCS for $25 billion
9:59 What KCS shareholders would receive from the Canadian Pacific deal
10:22 What would a combined Canadian Pacific-Kansas City Southern look like?
10:32 The two key advantages of the CP/KCS deal
10:51 April 6, 2021: CP and KCS receive letters of support for their merger
11:00 April 20, 2021: CN submits a competing proposal for KCS for $33.7 billion, outbidding CP
11:16 What KCS shareholders would receive from the Canadian National deal
11:31 CN and KCS have a small amount of overlap that CN would divest
11:39 Additional factors to consider in the CN/KCS deal
12:07 CN and CP each have their own websites campaigning in favour of their own mergers with KCS
12:21 They're even competing on who has the better alliteration!
12:26 May 2021: CP decided not to outbid CN's counter-offer
12:44 Kansas City Southern's Board deems CN's offer superior to CP's
12:49 August 10, 2021: CP increases its original bid for KCS to $31 billion
13:18 August 12, 2021: How the KCS Board responded to CP's new bid
13:29 CONCLUSION: What Could Happen Next with CN, CP, and KCS?
13:37 What needs to happen for the CN-KCS merger to go through
13:42 The Surface Transportation Board needs to approve CN's voting trust structure
13:58 KCS shareholders have to vote in approval of the merger with CN
14:11 The Rail Transportation Regulatory Agency of Mexico needs to approve the merger
14:23 The STB will do a comprehensive review of the merger before approving or denying it
14:38 What might happen if only one, or neither, vote passes
14:54 Another possibility: neither railway gets to merge with KCS
15:22 If the deal is derailed before it's completed, the "winner" could stand to lose
15:49 QUESTION: What are your thoughts on the CN/KCS and CP/KCS merger proposals?
16:17 Disclaimer and Outro
Disclosure: At the time of publishing this video, I am long Canadian National Railway (CNR.) I own this stock in my dividend garden.
Disclaimer: I am not a financial advisor. This video is for fun and entertainment purposes only and is not to be construed as financial advice. This video is presented AS IS, without warranty, and the information within might be outdated or inaccurate. Always do your own due diligence or seek the advice of a licensed financial professional. Investing carries risks, and past performance is no guarantee of future results. I am not liable or responsible for any financial decisions you make.

[@DividendGardening]

September 2022 update! I've just posted a follow-up with updates on CN and the CP-KCS merger proposal: Watch Part 3 here: kzbin.info/www/bejne/jHnWeHiKoahlhLs If you missed the last update on the CN-KCS and CP-KCS merger proposals, you can watch that (Part 2) here as well: kzbin.info/www/bejne/rXmsnGeDg7-UbKM

[@speed150mph]

I’ve worked for CP and work for CN now. All I can say I feel bad for the KCS employees since CP is going to get it. CP drove me to hate my job, and it wasn’t that the job was horrible, but it seemed like the management under Harrison and Creel were deliberately doing everything they could to make the employees miserable and lower moral.

[@speed150mph]

Also I want to point out that PSR is the worst swear word you can say to a railroader. Want to see one get angry, foam at the mouth, and start into a nuclear meltdown level rant, ask them about their thoughts on PSR.

[@haroldb1856]

Harrison and his protégé Creel fully embraced the mean spirited "culture of fear" style of management.

[@SyvakK]

That's really interesting to hear that. I work for CP and from every contractor I've worked with, they hate working for CN and much prefer CP. We also have had a fair few managers come over from CN to a lower position at CP because (from what I know, although I haven't worked for CN), CP pays more, and from everyone I've heard CP treats its employees better. Could be department specific. Were you in T&E? or? I will add, if you were in management during the early Hunter days (early-mid 2010's) then yeah I can definitely see it. It definitely was that everyone in management seemed scared for their job.

[@speed150mph]

@UCKWHBlZRYUq849Kng4QxAzw worked T&E as a work equipment maintainer from 2013 till 2017 at cp. left to become a Diesel engine mechanic in mechanical at CN. Got a $4 pay increase from what I got a cp, and while far from perfect, I’ve been a lot happier since I made the move.

[@daywalker________7677]

Yet CP employees each got $1500 for being essential workers throughout the pandemic. Whereas CN employees got a thank you letter and badge.

[@tpxchallenger]

I'm glad CP got it. My home team. My job interview back in 1979 I filled out the application, did the little test, and handed it in. Guy doesn't even look at it, just asks if I know anyone who works here. I tell him my brother's been a Carman helper for 5 years working a crane. "Okay, car shop, tomorrow morning. 7 o'clock. Steel toed boots. Don't be fucking late." Apprenticeship, just like that. Canadian Pacific Railway built western Canada, won two world wars, and is still a profitable company after 140 years.

[@jeremiahjeremiah1319]

Met some good dudes from CP. One welding Foreman and one engineer. I myself am a CN conductor. Have to say I'm leaning towards CN but still met some good people from the otherwise. Moving the economy a box car at a time

[@ace74909]

cn bought bc rail and other tiny railroads. cp gets kcs and that is fair

[@codyhilton1750]

I was happy to see that the NTB approved CP however I will miss the beautiful KCS painted locomotives.

[@MagnumLoadedTractor]

Atleast the Canadian pacific paint scheme won't be boring anymore,man I miss the pack mans

[@brian5606]

I think CP Rail would likely be the better railroad on account if the CN is allowed to merge with the KCS it will hurt CP Rail. If that is allowed to happen that means at some point it appears CP Rail could fall from grace for not having enough customers to service leaving CN the almighty one in Canadian Railroading, that's what the surface board is trying to eliminate as which railroad is best for the customer base and economy.

[@terrywallace8922]

The way I see it, NEITHER ONE OF THESE RAILROADS ARE FIT TO GET THE KCS! AND WHAT ABOUT THE EMPLOYEES WHO DEPEND ON THE KCS FOR EMPLOYMENT,AND KEEPING THEIR JOBS?!WHY IS THE STB EVEN ALLOWING THEM TO TAKE THE KCS!ITS ALL ABOUT THE MONEY!AND NOT ABOUT SAVING THE RAILROAD WORKERS FROM LOSING THEIR JOBS!AND THE STB SHOULD BE ABOLISHED FOR ALLOWING THESE CANADIAN LINES TO TAKE OUR RAILROADS FROM US! SHAME ON YOU, STB! YOU HAVE AKREADT ALLOWED CN TO TAKE THE ICG,EJAND E AND THE OTHER CLASS ONES THAT WERE STILL RUNNING!

[@blueshell6048]

Update, as of 2 hours ago from when I’m writing this, CP completed its acquisition of KCS. Fantastic video

[@benjlar1902]

CP maybe had the first coast to coast but CN runs A LOT more freight and a lot more trains than they do

[@chrisharty3627]

But not as efficiently

[@benjlar1902]

@@chrisharty3627 And you know that how? sources?

[@VisionsOfOdin]

Wow, who would have thought........But Cp is more logistically genious. They run two lines across the continental divide. CN only runs 1.....if you're shipping from the coast, Cp has a lot more options to get it across the snowy mountains. Up the golden beaver. It's time for Cp to rise

[@benjlar1902]

@@VisionsOfOdin CN/CP do directional running almost all across the country where they run on each others track so not exactly true. and even with 2 lines CN still hauls a hell of a lot more freight/intermodal

[@cpttankerjoe]

But CN is owned by Bill Gates immediately giving Canadian pacific the win

[@jordanschoenenberger4397]

The ICC would never approve CN, because that would give CN a monopoly on trains directly from the midwest to the gulf.

[@deepspire]

Likely not, as the ICC hasn’t been around in 40 years.

[@jordanschoenenberger4397]

@@deepspire fine, whatever the modern equivalent is, you sniveling little nitpicker

[@nak_0519]

@@jordanschoenenberger4397 40 years is a long time. Not a "nitpick".

[@jordanschoenenberger4397]

@@nak_0519 Still the same thing, it's a nit pick.

[@6484373]

PSR is the single worst thing to happen to the rail industry in a long time...

[@markwellzero0]

I would love too see the share holder's get a tonnage per terminal at csx from post 2017 and compare it to any before pre 17. There is a reason it is no longer published.

[@jeremyrousseauemond7070]

Cool video mate! You deserve more subscriber

[@luke_atthat]

Great video ! High quality information ! I watch it on Nov 5 2023, after searching info on the Christmas CP train and I discovered the final merge in april 2023. I will watch your part 2 and 3. Very good job you did.

[@955redavenger]

I own a couple shares of CP and I can say this is a good thing that CP is going to merge with KCS. I hope this has plenty of positive effects.

[@cowboysfan6699]

CP Rail is a horrible company run by foreigners like Keith Creel. Workers at CP Rail are treated like garbage. Canada should stop this merger and maintain control of its railways.

[@955redavenger]

@@cowboysfan6699 I looked deeper and I sold my shares. You're right about that. They need to work on their own company instead of merging with another.

[@cowboysfan6699]

@@955redavenger Thanks for the reply Kevin. Keep researching what I said. Canada's railways need to be controlled by Canadians and the globalist scum abusing our workers need to go to prison.

[@955redavenger]

@@cowboysfan6699 indeed. I agree with everything you said

[@samuelsmith2317]

Precision Scheduled Like Planting? Love it!

[@farmertyler8087]

I watched this thinking this was a big huge channel with hundreds of thousands of subscribers, then I went to like it and I was like wow, this guys going places

[@iatif1995]

The merger has happened between CP and KCS back in April 14.

[@daywalker________7677]

CN voter trust denied. Which I knew would happen. Overlap merger vs end-to-end merger... Of course CP was going to get it all along. It was an opportunistic bid for CN, whereas it was a necessary bid for CP. CN could have easily won the bid if regulators were going off the old rules before 2005. New rules benefitted CP tremendously.

[@goodsir7298]

You have really good videos

[@jeramiahnguyen1800]

I worked for CN. Hated it. Lol

[@carlh4279]

CP never seems to clean their locomotives in Canada but when I see them in USA they are very clean.

[@VisionsOfOdin]

Lots running big coal shipments out west or came from loads of weather systems in Alberta or bc or Saskatchewan

[@TheSjuris]

Haven’t seen a clean one in Milwaukee yet.

[@carlh4279]

@@TheSjuris maybe in the US, they power wash them weekly, in Canada they seem to never wash them.

[@TheSjuris]

@@carlh4279 Milwaukee is in the Midwest and their trains are always dirty.

[@carlh4279]

@@TheSjuris I've been there many times, but now I am on the "no USA for you list" for not disclosing my status. As long as biden Harris Pelosi are in charge, I have little interest in USA

[@donnie2832]

With all the counter offers, it reminds me of “Barbarians at the Gate” (the takeover of RJR•Nabisco)

[@caltrain908railfan]

You deserve more subs

[@sargentrowell81]

Hang on now....was Harrison the first one to come up with and implement Precision Schedules Railroading? We have that guy to that for 3 and half mile long trains?!?!

[@naetz]

Great video

[@DividendGardening]

Thank you!

[@codyallan9222]

We might need a video on where we’re at today! So much has happened since this video

[@grandriverrailfan6088]

2:32 The Canadian Pacific Railway wasn’t the first railway established in Canada. The Champlain And Saint Lawrence Railroad was the first established railway in Canada.

[@ijxrxmy]

CPR is the first coast to coast railroad in Canada. That what he said in the video

[@grandriverrailfan6088]

@@ijxrxmy oh shit, he said it in the text thing 😂😂😂 my bad.

[@ryandionne6269]

Did you show the cn building in edmonton because I'm like an hour away from edmonton

[@vmitchinson]

I worked in that building. It is iconic. The basement started out as the main passenger station but cn moved the rail yard out of the downtown.

[@railfanmaximstill7279]

STB rejected CN's request to merge with KCS.

[@ace74909]

Thank God they did. Cn needs to pay for buying bc rail

[@stephenheath8465]

What is so ironic that both are the true North American Transcon Roads

[@tom-and-mom]

11:04 or 11:05 A new foe has appeared! CHALLENGER APPROACHING!!!

[@GstarEdmsTrainProductions]

Cool!

[@VideoPresence2020]

music is very distracting, making it difficult to listen to the narrative

[@curiousoli]

I just hope they will rebrand for something like "Transamerica Rail" or "TransPacific Rail" or anything else that sounds better than "Canadian Pacific Kansas City"

[@ednorton47]

How about North American Railway?

[@WAL_DC-6B]

@@ednorton47 Or Canadian Pacific Southern

[@chriscraft1334]

I've always thought Grand Trunk Western & Central Vermont were Canadian National's two U.S. Subsidiaries & Soo Line is Canadian Pacific's U.S. Subsidiary.

[@yogiperogy]

Don’t forget CN’s Duluth Winnipeg and Pacific headquartered in Virginia Minnesota.

[@user-sj5ny9ot8m]

감사합니다.

[@briangasser973]

Feel like I was watching the fight for Spirit airlines by Jetblue and Frontier. The higher bud always seems to win

[@noelgenoway9360]

CP was/is a better bid!!

[@jamielacourse7578]

They're both trying to survive. Both have their pros & cons.

[@victorhoe2321]

I am Canadian by naturalization. Two things about the Canadian National Railroad and Canadian Pacific Railroad; Firat, Canadian National Rail is a Crown Corporation made up of bankrupt regional rail lines after approximately WW1. Canadian Pacific is a self funded corporation to start. Second, the term "Royal" is named only after a member of the UK's Royal family grants a charter as in "Royal Nova Scotia Tatoo" or "Royal Bank of Canada".

[@allencoolman3330]

Nice

[@georgebenson6036]

How much freight actually wants to go from Canada to Mexico or vice versa?

[@agentpr24]

For your information, the CN as the head office in Montreal but for all the time Harisson was CEO, this was a font. Everything was decided and done from Memphis. As of today, in 09/2023, I don't know.

[@nicholaspatton1742]

You can think of Canadian Pacific for 1800s Canadians to think: Canada 'to the' Pacific - from the east out to the Pacific ( west).

[@Slipperyisimproving]

What will happen to Kansas City Southern after the merger with CP?

[@WAL_DC-6B]

The railway will be called the Canadian Pacific-Kansas City Railroad with U.S. headquarters in Kansas City.

[@ace74909]

Cn cries

[@WAL_DC-6B]

@@ace74909 "cries" my tail! CN has enough from over the years with the purchases of the Wisconsin Central, Illinois Central, Bessemer & Lake Erie, Duluth, Winnepeg & Pacific, Elgin Joliet & Eastern and Duluth Missabe and Iron Range, etc.,

[@ace74909]

@@WAL_DC-6B cn is a greedy bastard that is what i am trying to say. now i think that cn is slowly on the way to bankruptcy

[@rocky-yx8wr]

@@WAL_DC-6B and bc rail and savage alberta lol

[@SantaFe19484]

It was a done deal with CP by the time I watched this.

[@fingernail3653]

my dad works for KCS

[@northlander4370]

maybe not for long ...

[@deeptoot1453]

I planted the like on time.

[@0fficialdregs]

BEARS VS PACKERS!!

[@betsymani2734]

Who else is watching this after the cpkc merger

[@JayJayAviation]

Everyone who sees this.

[@petenielsen3453]

CP in my opinion is the better of the two companies to deal with. CP has a far better track record than CN. CN has the idea they can do what ever they, and the devil take the hind seat. That is all I have to say

[@cliffwoodbury5319]

I did not know that PSR was a Canadian railway concept. I always thought it was a concept by American rail minds.

[@TheWizardGamez]

Canada is a thin country. They don’t have the width let alone ports to have rail fuckups. PSR allows for higher throughput while using the same 2-3 ports and super thin ground coverage

[@sigmanfloyd7179]

~ Actually, the only people who still think that the Montreal Cdns. are rivals with Toronto Maple Leafs are Toronto fans, everyone else knows that since the late sixties anyways, the rivalries are Toronto with the Detroit Red Wings and the Habs vs Boston Bruins. Just thought I'd clear that up. 😉👍🏻🇨🇦

[@northlander4370]

speaking of the Montreal Canadiens ...holy shit !

[@2kanchoo]

Pretty hilarious cp spends 27b and cn immediately does the same thing with an even shorter route to gulf of mexico, on essentially a handshake deal. lol.

[@juliecsisztu5676]

Only goods? Not people?

[@crossovertrainfan8345]

They should fight for it

[@aviazoin]

cp

[@carlh4279]

Bill gates is a major shareholder of cnr

[@treynolds94]

We all know who came out victorious.

[@AlexCab_49]

KCS also on owns Ferromex, the Mexican railroad company so that means Mexico's railways will be owned by a Canadian company

[@Pensyfan19]

Canada is taking over North America's rail commerce. Please help.

[@northlander4370]

@@Pensyfan19 jealous..?

[@WAL_DC-6B]

@@Pensyfan19 Think about all the U.S. companies with operations in Canada (Ford, General Motors, Walmart, Super 8 Motels, .... the list is endless!

[@jah651]

@@Pensyfan19 I hope you guys realize the only thing Canadian about Canadian Pacific is the Canadian in the name. Owned and operated by primarily US Investors which was made evident when they voted to change the name to Canadian Pacific Kansas City (CPKC).

[@thecanadianrailfan2354]

cp now owns ksc

[@ace74909]

I changed my mind it's yay now

[@kailanwarren2139]

Go CP go

[@Troglobyte_2]

In Québec WE ave cn and sometime WE Can see cp

[@stuew6]

lately news Mexican Government officials have Given okay

[@detroit8v715]

I find both railroads lousy. CP has nothing but dirty ass raggedy junk GEs. CN who wasted alot of money building a new tunnel at Port Huron, MI. to Sarnia, runs hardly any more trains through it than before the tunnel was built. Neither railroad is worthy of KCS which has more class than CP and CN ever had.

[@northlander4370]

It isnt about class , it is about money and CP and CN both have enough to fight over who gets KCS .

[@Signal1072]

Well they’re doing better than Norfolk Southern

[@terrywallace8922]

When this man lmplemented precision scheduled railroading,he brought the end of the class one railroads!and now ,csxand other class ones have embraced this railroad-destroying concept!as a result of this, YOU the customers are now suffering from a lack of service and efficiency in delivering goods and services!AND this psr has caused thousands of workers to lose their jobs! And he opened the door to the destruction of railroads and economical opertunities for the railroads! Also,this has led to one man operation and has raised serious concerns about safety and the ability to serve the needs of the customers and consumers! Also, these one man crews will become a major disaster for both the railroad and the safety of the public! And many problems will arise in the operation of trying to get one man to do everything! For example, what if you have one man operating a train with five locomotives, and one of these units alarm bells. Ring,and the unit has a fire, and he is coming to a grade crossing, what can one man do?he cannot leave the head end,and put out the fire!AND HE WILL be in major trouble if this happens!for there is no grunted that this won't happen!AND , lord help him if he has a derailment with tankcars carrying hazardous and extremely dangerous chemicals! ,as well as flammable liquids such as fuel , lp gas, and gasoline,and diesel fuel! All as a result of this psr!this concept has NO ACE IN THE RAILROAD INDUSTRY! THIS IS THE MOST DANGEROUS THING TO EVER BE PUT IN PRACTICE ON THE RAILROADS PSR STINKS!AND SHOULD NEVER BE ALLOWED TO BE IN THE RAILROAD INDUSTRY, NOT EVER! TWO MEN CREWS ARE MORE SAFER THAN ONE MAN CREWS!AND IF SOMETHING GOES WRONG, ONE MAN CAN STAY UP FRONT,AND THE OTHER CAN GO SEE WHAT IS GOING ON WITH THE LOCOMOTIVES IN THE CONSIST.AND IF A FIRE STARTS, HE CAN PUT IT OUT!

[@ace74909]

lac magantic and hinton train collision go brrrrrr

[@samuelthompson7358]

both are crapy companies, contacting them for cargo transportation is painful... simply nobody reply inquiries seem they don't care about getting new business

[@northlander4370]

Their bank accounts are huge so they must be doing something right ..

[@jeremiahjeremiah1319]

The problem is, people have the opportunity to come from the ground up into management and super intended positions. Awesome for people that work hard but may not necessarily have any business's sense

[@atsf4931]

Well this aged poorly since CN is done for

[@ace74909]

Well cn got bc rail so CP deserved kcs

[@danatmatchvox]

the goverment for ave all CNs debt during privatisation

[@kevinb9327]

Call me a chauvinist pig, but I'd be concerned if ANY foreign-owned railroad bought an American RR. However, I am a capitalist, also. 'Splain it to me.

[@TheSjuris]

Many American railroads have been bought by both Canadian rail companies.

[@northlander4370]

the Dakota , Minnesota and Eastern RR (DM&E) , and the Iowa , Chicago and Eastern (I C &E ) were bought by C N ..

[@kevinb9327]

KSU has been "delisted" on the New York Stock Exchange. KSU stockholders will be compensated in cash, and CP stock.

[@msnow22000]

Genesee and Wyoming operate in Australia. KCS owns rail in Mexico. CP and CN are already operating in the USA.

[@jeremiahjeremiah1319]

Trust me in Canada it pisses me off that a foreign nation owns our 407 toll highway

[@ltmongoose1594]

First dodge and jeep, now KCS, im tired of forgin fucking componys buyinng out american componies.

[@northlander4370]

But it is ok for U S companies to buy foreign companies right ?

[@goviacn1]

CP is American company fool

[@northwesttravels7234]

Music is annoying.

[@jwrailve3615]

Wait so cp red is staying and kcs beautiful schemes are leaving? Lame…

[@train_chicken6143]

i hate cn lol

[@northlander4370]

They don't care !

[@davem9975]

Greed = no safety for its workers!