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CN Drives North American Economic Growth, Purchasing 1,000 New Generation, High-Capacity Hopper Cars to Enable Record Grain Shipments

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The new railcars will be built by TrinityRail at a facility in Mexico

The new generation high-capacity hopper railcars will expand capacity, providing greater efficiency, reliability and safety for North American grain farmers, their customers, and the supply chain

MONTREAL, May 07, 2021 (GLOBE NEWSWIRE) -- As it moves ahead towards its vision of becoming the first truly North American railway, CN (TSX:CNR) (NYSE:CNI) today announced it has placed an order for 1,000 new generation, high-capacity grain hopper cars. These innovative new railcars, to be built in a TrinityRail manufacturing plant in Mexico, will help meet the growing needs of North American grain farmers and demands of grain customers.

CN leads the industry in moving grain, and the TrinityRail order is part of a larger program to build and renew a fleet of 6,000 hopper railcars over the next three years. CN recently made a formal offer to acquire Kansas City Southern, a fellow Class I railway. The combination would extend the span of CN's network from Canada and the U.S. into Mexico, making it the first railroad to link North America's three national economies.

"These cars will be manufactured in Mexico and will help move more grain across the CN rail network, which continues to make CN the embodiment of a true USMCA railroad. Being an engine of North American economic growth and prosperity means that CN focuses continually on making strategic investments. Adding these 1,000 new generation hopper cars to our fleet is a prime example of that. In addition to our superior proposal to combine with KCS, this is a step further in our vision of seamlessly connecting ports and rails in the United States, Mexico and Canada and of providing superior service, enhanced competition and new market access to move goods across North America efficiently and safely."
     –  JJ Ruest, President and Chief Executive Officer, CN

"CN's grain movement has been resilient during the pandemic, achieving 14 straight months of record Canadian grain volume shipments. The dedication of our railroaders as well as our agri-food and supply chain partners has been key to this exceptional performance. By purchasing additional hopper cars, we are strengthening our commitment to grain farmers, grain customers, and the overall supply chain to support and expand our movement of grain to international markets as demand continues to increase."
   –  Rob Reilly, Executive Vice-President and Chief Operating Officer, CN

"The purchase of 1,000 new high-capacity hopper cars by CN is good news for Canadian grain farmers, grain customers, and the Canadian economy. A safe and reliable freight rail system is a critical part of a healthy Canadian economy that supports good middle class jobs."
     –  The Honourable Omar Alghabra, Minister of Transport, Government of Canada.

"As grain farmers know well, we need a reliable transportation system to get our high-quality products to market in a timely manner. Today's great announcement by CN of 1,000 new high-capacity hopper cars builds on their success of month-over-month records for grain movement amid record high grain prices. The Transportation Modernization Act our Government passed in 2017 also helped incentivize these kinds of investments. All of it points clearly to an even brighter future on the horizon for Canadian grain farmers and the entire grain value-chain."
     –  The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food, Government of Canada

"The employees of Trinity de Mexico are honored to receive this valuable order from Canadian National. Trinity is a pioneer in the manufacturing of railcars in Mexico which has greatly contributed to the development of the Sabinas region, the state of Coahuila, the entire country of Mexico, and the North American freight railcar market."
     –  Luis Pardo, Executive Vice President, Trinity de Mexico

"On behalf of Canada's grain farmers, we are encouraged by any investment that helps get our grain to markets across the world. As our production increases, we see this as a positive sign that our rail capacity is poised to keep up with growing demand here and abroad."
     –  Andre Harpe, Chairman, Grain Growers of Canada

CN's continued ability to deliver record volumes of grain shipments is largely due to investments made by the company over the past few years to improve safety and network fluidity. The purchase of these lighter, shorter, high capacity rail cars will enable CN to move more grain, with less equipment, supporting the company's focus on better serving customers by providing safe, efficient, low carbon freight transportation services. CN is the most fuel-efficient railway in North America, using 15% less fuel per gross ton mile than the industry average. In 2020, CN's actions to reduce emissions, mitigate climate risks and to develop the low-carbon economy resulted in CN being one of only three Canadian companies listed on CDP's prestigious Climate A List. The partnership with TrinityRail will continue to help CN maintain its commitment to a cleaner connected continent.

To find out more about CN's commitment to grain please visit www.cn.ca/grain.

For more information about CN's superior proposal to combine with KCS, please visit www.ConnectedContinent.com.

About CN

CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. As the only railroad connecting Canada's Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.

Forward Looking Statements

Certain statements included in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws, including statements based on management's assessment and assumptions and publicly available information with respect to KCS, regarding the proposed transaction between CN and KCS, the expected benefits of the proposed transaction and future opportunities for the combined company. By their nature, forward-looking statements involve risks, uncertainties and assumptions. CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as "believes," "expects," "anticipates," "assumes," "outlook," "plans," "targets," or other similar words.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements of CN, or the combined company, to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking statements in this news release include, but are not limited to: the outcome of any possible transaction between CN and KCS, including the possibility that a transaction will not be agreed to or that the terms of any definitive agreement will be materially different from those described; uncertainties as to whether KCS will cooperate with CN regarding the proposed transaction; the parties' ability to consummate the proposed transaction; the conditions to the completion of the proposed transaction; that the regulatory approvals required for the proposed transaction may not be obtained on the terms expected or on the anticipated schedule or at all; CN's indebtedness, including the substantial indebtedness CN expects to incur and assume in connection with the proposed transaction and the need to generate sufficient cash flows to service and repay such debt; CN's ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the possibility that CN may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all and to successfully integrate KCS' operations with those of CN; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; the retention of certain key employees of KCS may be difficult; the duration and effects of the COVID-19 pandemic, general economic and business conditions, particularly in the context of the COVID-19 pandemic; industry competition; inflation, currency and interest rate fluctuations; changes in fuel prices; legislative and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators; the adverse impact of any termination or revocation by the Mexican government of KCS de México, S.A. de C.V.'s Concession; increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; trade restrictions or other changes to international trade arrangements; transportation of hazardous materials; various events which could disrupt operations, including illegal blockades of rail networks, and natural events such as severe weather, droughts, fires, floods and earthquakes; climate change; labor negotiations and disruptions; environmental claims; uncertainties of investigations, proceedings or other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should also be made to Management's Discussion and Analysis in CN's annual and interim reports, Annual Information Form and Form 40-F, filed with Canadian and U.S. securities regulators and available on CN's website, for a description of major risk factors relating to CN.

Forward-looking statements reflect information as of the date on which they are made. CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

No Offer or Solicitation
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where to Find It
This news release relates to a proposal which CN has made for an acquisition of KCS. In furtherance of this proposal and subject to future developments, CN (and, if a negotiated transaction is agreed, KCS) may file one or more registration statements, proxy statements, tender offer statements or other documents with the U.S. Securities and Exchange Commission ("SEC") or applicable securities regulators in Canada. This news release is not a substitute for any proxy statement, registration statement, tender offer statement, prospectus or other document CN and/or KCS may file with the SEC or applicable securities regulators in Canada in connection with the proposed transactions.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), TENDER OFFER STATEMENT, PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC OR APPLICABLE SECURITIES REGULATORS IN CANADA CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED TRANSACTIONS.   Any definitive proxy statement(s), registration statement or prospectus(es) and other documents filed by CN and KCS (if and when available) will be mailed to stockholders of CN and/or KCS, as applicable. Investors and security holders will be able to obtain copies of these documents (if and when available) and other documents filed with the SEC and applicable securities regulators in Canada by CN free of charge through at www.sec.gov and www.sedar.com. Copies of the documents filed by CN (if and when available) will also be made available free of charge by accessing CN's website at www.CN.ca.

Participants
This news release is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC and applicable securities regulators in Canada. Nonetheless, CN and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transactions. Information about CN's executive officers and directors is available in its 2021 Management Information Circular, dated March 9, 2021, as well as its 2020 Annual Report on Form 40-F filed with the SEC on February 1, 2021, in each case available on its website at www.CN.ca/investors/ and at www.sec.gov and www.sedar.com. Additional information regarding the interests of such potential participants will be included in one or more registration statements, proxy statements, tender offer statements or other documents filed with the SEC and applicable securities regulators in Canada if and when they become available. These documents (if and when available) may be obtained free of charge from the SEC's website at www.sec.gov and www.sedar.com, as applicable.

Contacts:  
Media
Canada
Mathieu Gaudreault
CN Media Relations & Public Affairs
(514) 249-4735
Mathieu.Gaudreault@cn.ca


Longview Communications & Public Affairs
Martin Cej
(403) 512-5730
mcej@longviewcomms.ca


United States
Brunswick Group
Jonathan Doorley / Rebecca Kral
(917) 459-0419 / (917) 818-9002
jdoorley@brunswickgroup.com
rkral@brunswickgroup.com

Investment Community
Paul Butcher
Vice-President
Investor Relations
(514) 399-0052
investor.relations@cn.ca

 


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