A financial analysit is speculating that the time might be right for Canadian National to consider a major acquisition, and he speculates that Kansas City Southern may be the target.
The report by Scott Deveau appeared in today’s Financial Post. Deveau reports that Benoit Poirier, Desjardins Securities analyst, says KCS might be a “perfect match” for CN.
According to the article: “KCS is the largest railway operating in Mexico, carrying about 42% of the $1.5-billion in rail revenue coming from the country in 2009, he noted. Mexico’s gross domestic product is expected to grow by 3.5% in real terms in 2011, and by a further 3.9% in 2012, outpacing growth in Canada and the U.S., he added.”
Mr. Poirier estimates a deal to buy KCS would be valued at about $7.7-billion, and could potentially add about $10 a share in earnings to CN’s bottom line.
The full text of the article is on the Financial Post website.