CANADIAN NATIONAL TO ACQUIRE WISCONSIN CENTRAL
Canadian National Railway Co. announced today the takeover of Rosemont, Ill.-based Wisconsin Central Transportation Corp. for $1.2 billion in cash.
The acquisition has been approved by the boards of directors of both railroads, but is subject to approvals by the U.S. Surface Transportation Board and Wisconsin Central stockholders.
CN will acquire all of the common stock of Wisconsin Central for cash valued at U.S.$17.15 per share.
Wisconsin Central’s North American railroad system consists of Class II and Class III railroads with approximately 2,850 miles of track and trackage rights in Wisconsin, Illinois, Minnesota, Michigan’s Upper Peninsula and Ontario.
CN said that its acquisition will secure a link in the company NAFTA network — the main-line railroad connecting Chicago, Superior, Wis., and CN’s transcontinental network across Canada.
“Single-line service over this link under CN ownership will improve the competitiveness of CN/WC and their customers in Canada-United States trade, which is growing annually at more than 10 per cent,” said CN president and chief executive officer Paul M. Tellier.
CN predicted that efficiencies that will result from the acquisition offer the prospect of enhancing its growth in the domestic U.S. marketplace and benefiting customers with improved through service at the busy Chicago gateway.
“The CN/Wisconsin Central Transportation Corp. transaction is a simple, straightforward, pro-competitive, end-to-end combination,” Tellier said. “Not a single ‘two-to-one’ point will arise in the U.S. as a result of the merger, and there will be no other significant adverse impacts on competition.”
The takeover of Wisconsin Central follows last year’s failed merger between CN and BNSF, which was blocked by the Surface Transportation Board.
“It’s time for Wisconsin Central to join a broader North American rail network, and to move to the next level of excellence by combining with CN,” said Thomas F. Power, Jr., president and chief executive officer of Wisconsin Central. “That’s why we approached CN about acquiring Wisconsin Central Transportation Corp. to maximize shareholder value.”
Wisconsin Central said that post-merger growth prospects for CN’s U.S. operations will enable CN to minimize the impact on employment through attrition, retraining and relocation.
Wisconsin Central plans to sell its minority equity investments in overseas rail ventures in the United Kingdom and New Zealand as soon as possible. The company owns 42.5 percent of English, Welsh & Scottish Railway Holdings Ltd.
CN had revenues of Can$5.4 billion ($3.7 billion) in 2000. Wisconsin Central’s revenues for last year were over $363 million.