Canadian National Railway (CN) has stepped up its offer to acquire Kansas City Southern (KCS) in a cash-and-stock bid worth approximately $33.7bn.

CN’s offer of $325 for every KCS share, along with the assumption of $3.8bn of outstanding KCS debt, represents a 21% premium over the proposal by Canadian Pacific Railway (CP) to acquire KCS.

The latest offer by CN follows a merger agreement signed by CP to acquire KCS in a cash-and-stock deal of approximately $29bn last month.

CN’s offer will be evaluated by the KCS board of directors according to KCS’ merger terms with CP.

KCS stated that its board of directors has not made any determination regarding CN’s proposal at this point in time.

If the latest proposal materialises, CN states that it will ‘create a premier railway for the 21st century connecting ports in the US, Canada and Mexico to facilitate trade and economic prosperity across North America’.

CN president and CEO JJ Ruest said: “CN is ideally positioned to combine with KCS to create a company with broader reach and greater scale and to seamlessly connect more customers to rail hubs and ports in the US, Mexico and Canada.

“CN and KCS have highly complementary networks with limited overlap that will enable them to accelerate growth in single-owner, single-operator, end-to-end service across North America.

“With safer service and better fuel efficiency on key routes from Mexico through the heartland of America, the result will be a safer, faster, cleaner and stronger railway.”

CN board chair Robert Pace said: “We firmly believe our proposal is far superior to KCS’ existing agreement with CP because it offers superior financial value over the immediate and long-term, a more complementary strategic fit, greater choice and efficiencies for customers and enhanced benefits for employees and local communities.”