The head of Canadian National Railway Co. said its planned merger with Kansas City Southern (KCS) will bring the Montreal-based rail company closer to becoming a true North American railroad able to serve the continent-wide free trade agreement. 

“We’ve always had our eyes, back to the days of Paul Tellier, about being the NAFTA railroad not just by partnering commercially with the KCS to the marketing alliance that we had 20 years ago, but also at some point making an acquisition,” said JJ Ruest, president and chief executive officer at CN Rail, in a broadcast interview.

In 1998, CN Rail put its North American railroad plan on track by acquiring Illinois Central Railroad, adding a key north-south route into the U.S. spanning from Chicago to New Orleans. 

This considerably expanded the company’s existing Canadian coast-to-coast rail route that links Western Canada to the Atlantic provinces. By acquiring KCS, CN Rail could further expand its rail system by adding more southern routes that would reach down to the Gulf of Mexico.

CN Rail first began operating in the U.S. over 100 years ago through the Grand Trunk Western railway.

CN Rail has been locked in a bidding war with Canadian Pacific Railway Ltd. to acquire KCS. Ruest maintained that CN has a superior offer for KCS, though he did not completely rule out the possibility of raising the bid for the railway if needed.

With this recent bid to acquire KCS, Ruest said the KCS board was committed to optimizing shareholder value by selling the company to a strategic buyer.

“So, now’s the time,” Ruest said. “This is not a new talk, we’ve always been looking strategically at different acquisitions, KCS especially, and know we know we can execute since the KCS board decided they’re willing to engage down that path very seriously.”