425 1 d363307d425.htm 425 425

Filed by Canadian Pacific Railway Limited

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934, as amended

Subject Company: Kansas City Southern

Commission File No. 001-04717

Date: May 5, 2021

The following is an article that was featured in the Crain’s Chicago Business newspaper delivered on May 3, 2021.


CRAIN’S CHICAGO BUSINESS “CHJCAGOBUSJNESS.COM I MAY 3, 2021 I ll!m” Why this deal will make Chicago’s congestion problem worse “It is unthinkable that Canadian National is proposing to merge with Kansas City Southern and add more trains to this already strained network, the CEO of Canadian Pacific writes.” BY KUTii CREEL Canadian Pacific “As a railroader, L spend a lot of time” on the road. “But I call Chicago home. Chicago is where, 26 years ago, I got the chance of a lifetime. That opportunity, pre­ sented to me in the NBC Tower, led me on a patl1 from tl1e Illinois Central Railroad in Memphis as a trainmas­ ter all the way to CEO of one of North America’s great historic railways, Ca­ nadian Pacific (CP).” “Chicago is tl1e center of our great country, witl1 culture, architecture,” “arts, sports-special shout out to the major corridors in Cook County. As all the other railroads-congestion” “Blackhawks -Midwestern people Crain’s has noted, the transportation in one area impacts otl1ers, includ­ with great work ethic, warm hearts industry employs more than 160,000 ing Metta and Amtrak, which use” “and grit. I moved here in 2007, raised workers in Illinois. It has an “”out­” “my kids here and find happiness and sized”” effect on the regional econo­ restfulness here after long days and my and quality of life.” “nights of work. 1 understand, having worked at L w1derstand the price that Chica- both Canadian National (CN) and goans pay every day for being the na- CP in Chicago, the complexity and tion’s rail hub.Six major freight rail- the fragility of tl1e rail network; its in­ roads converge here and something terconnected nature is w1deniable.” “like 7,000 trucks a day pass through CN’s route through Chicago touches” tl1e same tracks to get folks in and out of the city. Congestion issues are furtl1er magnified during tl1e winter months. A proposition that would hurt Chicago “So, it is unthinkable to me that CN” is proposing to merge with Kansas


CRAIN’S “CHICAGO BUSINESS MAY 3,2021” City Southern (KCS) and add more “trains to this already strained network. Their plan would put more pressure on both the highways and railways and bring 100 percent of the traffic through Chicago. Any proposal to bring additional, unnecessary traffic to Chicago stands against Chicago’s best interests. It’s also against the nation’s best interests relative to commerce, given how important Chicago is-easily the most crucial hub in North America for railroads. Fluidity in Chicago is the rail industry’s most important asset.” “Since both of CN’s east-west lines converge in Chicago, it’s impossible for them to avoid the Chicagoland rail network. There’s no offset in that proposal that would benefit or protect capacity in the Chicago terminal. “services, which already suffer from” major delays caused by CN • Increased delays for Metra • Increased wait times for motorists at crossings • Increased noise for residents who live near the tracks • Increased environmental impacts on local communities An agreement that would relieve congestion “CP, in agreement with KCS, has a plan to take traffic out of Chicago by providing both the flexibility to by­ pass Chicago and the ability to im­ prove operations in the city. This will be of enormous benefit to CPand KCS customers aswell as the city itself.” We have long been an advocate for the industly routing traffic over al- With CP’s network through Iowa “and KCS’ co1mection in Kansas City, our customers would benefit from improved flows between Canada and the U.S. Upper Midwest with Mexico, Texas and Louisiana.” We would also create additional capacity for growth in Chicago while unlocking positive environmental benefits through reduced emissions in the city. “Right now the Surface Transpor­ tation Board is considering a voting trust for CN which, ifapproved, could let them move forward with this deal. Chicago has two clear choices: CN putting more pressure on the city’s hub unnecessarily, or CP’s agreement with KCS that would route traf ­” fic away from Chicago. “””This is the tin1e to let the Surface” What a CN+KCS combination could mean for Chicagoland: • Increased traffic routing through ternative gateways that keep it out of Transportation Board know that Chicagoland. CP’s agreement with KCS is better Here’s how the CP/KCS combina- for Chicago. “and around Chicago, including over tion would work in a nutshell: The As a fellow Chicagoan, trust me on” the CN-owned Elgin Joliet and East- primary route to and from West- this one. em (EJ&E) Railway corridor in sub- em Canada would parallel the west urban Chicago side of the Mississippi River through • Increased delays and reduced Iowa. Traffic wouldn’t need to come on-time performance for Amtrak’s “City of New Orleans, Illini and Saluki” “into Chicago to reach Texas, Mexico” or the Gulf. Keith Creel ispresident and CEO of Canadian Pacific. “Rep1in1ed wiLh Jlermi ion from Crtlin S CliitftgtJ 8usi1u.u.tO 2021 Craio Com1nuoicalion.s I nc. AU l””ight rerved.” “””fn11.her duplicalio1l “”’iLhout pe1·mission is p1·ohibiled. \r1sit www.chicagobus.ioess.com/secljon/ rep1in1s..#CB21064”


FORWARD-LOOKING STATEMENTS AND INFORMATION

This communication includes certain forward looking statements and forward looking information (collectively, FLI), which FLI may not be appropriate for other purposes. FLI is typically identified by words such as “anticipate”, “expect”, “project”, “estimate”, “forecast”, “plan”, “intend”, “target”, “believe”, “likely” and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI.

Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the timing and completion of the transaction, including receipt of regulatory and shareholder approvals and the satisfaction of other conditions precedent; interloper risk; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the transaction and other disruptions arising from the transaction; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; the pending share split of CP’s issued and outstanding common shares; potential changes in the CP share price which may negatively impact the value of consideration offered to KCS shareholders; the ability of management of CP, its subsidiaries and affiliates to execute key priorities, including those in connection with the transaction; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped; inflation; geopolitical instability; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; exchange rates; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions or other changes to international trade arrangements; the effects of current and future multinational trade agreements on the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City


Southern de Mexico, S.A. de C.V.’s Concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions, including the availability of short and long-term financing; and the pandemic created by the outbreak of COVID-19 and resulting effects on economic conditions, the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions, and disruptions to global supply chains.

We caution that the foregoing list of factors is not exhaustive and is made as of the date hereof. Additional information about these and other assumptions, risks and uncertainties can be found in reports and filings by CP and KCS with Canadian and U.S. securities regulators, including any proxy statement, prospectus, material change report, management information circular or registration statement to be filed in connection with the transaction. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.

Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this communication is expressly qualified in its entirety by these cautionary statements.

ABOUT CANADIAN PACIFIC

Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit www.cpr.ca to see the rail advantages of CP. CP-IR

ADDITIONAL INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND IT

CP will file with the U.S. Securities and Exchange Commission (SEC) a registration statement on Form F-4, which will include a proxy statement of KCS that also constitutes a prospectus of CP, and any other documents in connection with the transaction. The definitive proxy statement/prospectus will be sent to the shareholders of KCS. CP will also file a management proxy circular in connection with the transaction with applicable securities regulators in Canada and the management proxy circular will be sent to CP shareholders. INVESTORS AND SHAREHOLDERS OF KCS AND CP ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND MANAGEMENT PROXY CIRCULAR, AS APPLICABLE, AND ANY OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC OR APPLICABLE SECURITIES REGULATORS IN CANADA IN CONNECTION WITH THE TRANSACTION WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT KCS, CP, THE TRANSACTION AND


RELATED MATTERS. The registration statement and proxy statement/prospectus and other documents filed by CP and KCS with the SEC, when filed, will be available free of charge at the SEC’s website at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the registration statement, proxy statement/prospectus, management proxy circular and other documents which will be filed with the SEC and applicable securities regulators in Canada by CP online at investor.cpr.ca and www.sedar.com, upon written request delivered to CP at 7550 Ogden Dale Road S.E., Calgary, Alberta, T2C 4X9, Attention: Office of the Corporate Secretary, or by calling CP at 1-403-319-7000, and will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by KCS online at www.investors.kcsouthern.com, upon written request delivered to KCS at 427 West 12th Street, Kansas City, Missouri 64105, Attention: Corporate Secretary, or by calling KCS’s Corporate Secretary’s Office by telephone at 1-888-800-3690 or by email at corpsec@kcsouthern.com.

You may also read and copy any reports, statements and other information filed by KCS and CP with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 or visit the SEC’s website for further information on its public reference room. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to appropriate registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

PARTICIPANTS IN THE SOLICITATION OF PROXIES

This communication is not a solicitation of proxies in connection with the transaction. However, under SEC rules, CP, KCS, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the transaction. Information about CP’s directors and executive officers may be found in its 2021 Management Proxy Circular, dated March 10, 2021, as well as its 2020 Annual Report on Form 10-K filed with the SEC and applicable securities regulators in Canada on February 18, 2021, available on its website at investor.cpr.ca and at www.sedar.com and www.sec.gov. Information about KCS’s directors and executive officers may be found on its website at www.kcsouthern.com and in its 2020 Annual Report on Form 10-K filed with the SEC on January 29, 2021, available at www.investors.kcsouthern.com and www.sec.gov. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of such potential participants in the solicitation of proxies in connection with the transaction will be included in the proxy statement/prospectus and management proxy circular and other relevant materials filed with the SEC and applicable securities regulators in Canada when they become available.