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Filing under Rule 425
- ---------------------
Filer: Burlington Northern Santa Fe Corporation
Companies that are subject to the filing:
Canadian National Railway Company
North American Railways, Inc.
Registration Statement No. 333-94397
[BNSF LOGO] Robert D. Krebs Burlington Northern Santa Fe
Chairman and Chief Executive Corporation
Officer 2650 Lou Menk Drive
2nd Floor
Fort Worth, TX 76131-2830
March 23, 2000
Dear Fellow Shareholder:
I am writing to give you an update on our proposed combination with
Canadian National Railway Company (CN) in light of recent actions by the U.S.
Surface Transportation Board (STB). Earlier this month in my letter to you, I
indicated that Paul Tellier, CN's CEO, and I would be testifying on March 7 at
a four-day hearing held by the STB to discuss the impact of future rail
consolidations on the present and future structure of our industry.
In my testimony before the STB, I urged them to protect competition, not
competitors, in accepting proposals for future railroad combinations. I also
pointed out that the Burlington Northern and Santa Fe merger has delivered the
substantial benefits that were promised to shippers, unlike recent mergers
which have caused shippers to feel shortchanged. Our shippers, employees and
owners have clearly benefited from the BNSF transaction in every category of
safety, business growth, customer service, transportation value, efficiencies,
employment security, expanded capacity, investment in equipment, and financial
performance.
At the end of the four-day hearing, Paul and I issued a statement, which in
part said: "We are committed to service guarantees and we will continue to
explore with shippers ways to inject greater competition into the industry, in
addition to keeping all efficient gateways open. We also will include in our
application a dispute-resolution process for shippers who are less than
satisfied with our service as part of the required STB post-combination
oversight process. In addition, our application will demonstrate how we will
preserve and enhance competition both on the North American Railway network
and off line, and where we have heard expressions of concern."
On Friday afternoon, March 17, one week after the hearings concluded and
three days prior to when we could first file our application with the STB, the
STB imposed a 15-month moratorium on all proposed rail consolidations. Perhaps
you have already read about this in your local newspaper, but I wanted to
share with you what I said in a news release following the STB's announcement.
Attached to this letter is that news release.
Late on March 17, we filed with the U.S. Court of Appeals for the District
of Columbia Circuit, as did CN, a petition for review of the STB's order. We
believe that the STB decision is unlawful, arbitrary and capricious, and that
the STB lacks statutory authority to impose such a moratorium.
As a result of the STB's order, we have not established a date for our
special shareholders meeting to vote on our combination with CN. We have
scheduled our Annual Meeting of Shareholders for 2:00 p.m. on April 19, 2000
in Fort Worth. We have also included with this letter a copy of our 1999
Annual Report to Shareholders, our proxy statement for the 2000 Annual Meeting
and your proxy card for completion and signing.
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I appreciate your support and commitment to the success of BNSF, and I will
keep you updated on our progress toward combining with CN.
Sincerely,
/s/ Robert D. Krebs
Robert D. Krebs
Chairman and Chief Executive Officer
North American Railways, Inc., and CN have filed a registration statement
on Form F-4/S-4 with the SEC in connection with the securities to be issued
in the combination. This filing also includes the preliminary proxy
statement for the shareholders meetings to be held for approval of the
combination. Investors should read this document, and other documents filed
with the SEC by BNSF, CN and North American Railways Inc. about the
combination, because they contain important information. These documents may
be obtained for free at the SEC's Web site, www.sec.gov. Other filings made
by BNSF on Forms 10-K, 10-Q and 8-K may be obtained for free from the BNSF
Corporate Secretary's office at (817) 352-6856. Other filings made by CN on
Forms 40-F and 6-K may be obtained for free from the CN Corporate
Secretary's office at (514) 399-6569. For information concerning
participants in BNSF's solicitation of proxies for approval of the
combination, see "Certain Information Concerning Participants" filed by BNSF
on Schedule 14A under SEC Rule 14a-12.
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[BNSF LOGO] NEWS
Contact: Richard Russack FOR IMMEDIATE RELEASE
(817) 352-6425
BNSF's Krebs Says STB Moratorium Will Prevent BNSF and CN
- Rail Industry's Best Service Providers -
From Giving Shippers Even Better Service
FORT WORTH, Texas, March 17, 2000 -- Burlington Northern Santa Fe
Corporation (NYSE: BNI) (BNSF) Chairman and Chief Executive Officer Robert D.
Krebs said, in response to today's Surface Transportation Board announcement,
that, "We are extremely disappointed with the STB's decision to impose a 15-
month moratorium on proposed rail consolidations. We have reviewed the decision,
and while Chairwoman Linda Morgan's action may be well-intentioned, as it
stands, it has the effect of denying our proposed combination with Canadian
National Railway Company (CN) before receiving our application and giving it a
proper review."
Krebs pointed out that, "If the STB decision survives judicial review, the
result of the STB's decision is to penalize BNSF and CN, the two major North
American railroads who are taking care of their customers, because of the
failures of other railroads whose mergers have resulted in debilitating and
costly service failures for shippers."
During the four-day hearing held last week by the STB to consider the
future structure of the rail industry, Krebs said, "There was no clear consensus
for imposing a moratorium. In fact, there was significant support from the
Secretary of Transportation, shipper associations such as the National
Industrial Transportation League, numerous individual shippers, short line
railroads and municipalities for BNSF and CN to file their common control
application without delay."
Krebs indicated that "BNSF will thoroughly review today's decision to
determine what appropriate legal action we can take. If Chairwoman Morgan's
radical decision stands, the effect would be something unheard of in any
industry: For a period of 15 months, industry participants will be denied the
opportunity to realize service and efficiency improvements that a carefully
conceived and well executed combination can provide shippers, shareholders,
employees and the public."
- more -
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BNSF's Krebs Says STB Denies/Page Two
Krebs said that "Over the past four years, BNSF has spent about $9.5
billion to improve its network, locomotive and car fleet, and to build and
expand terminals and intermodal facilities. These investments have enabled BNSF
to provide customers with on-time service year-to-date in the 94 percent range
- --- the best rail transportation service I've seen in my 34 years in the
industry. We believe a combination with CN is the next step to providing our
customers with even better service and our owners with better financial
performance.
"It is hard to believe that a federal agency can change the rules and deny
us a forum, established by law, to have our case heard. Based on all existing
criteria for approving rail mergers, our proposed combination passes with flying
colors. We have indicated that we are prepared to raise the bar ourselves to
ensure that there is no service disruption and that greater competition is
injected into the industry," Krebs noted.
Through its subsidiary, The Burlington Northern and Santa Fe Railway
Company, headquartered in Fort Worth, Texas, BNSF operates one of the largest
rail networks in North America with 33,500 route miles of track covering 28
states and two Canadian provinces.
North American Railways, Inc. and CN have filed a registration statement on
Form F-4/S-4 with the Securities and Exchange Commission (SEC) in connection
with the securities to be issued in the combination. This filing also includes
the proxy statement for the shareholders' meetings to be held for approval of
the combination. Investors should read this document and other documents filed
with the SEC by CN, BNSF, and North American Railways, Inc. about the
combination because they contain important information. These documents may be
obtained for free at the SEC's Web site, www.sec.gov. Other filings made by
-----------
BNSF on Forms 10-K, 10-Q and 8-K may be obtained for free from the BNSF
Corporate Secretary's office, 817-352-6856. For information concerning
participants in BNSF's solicitation of proxies for approval of the combination,
see "Certain Information Concerning Participants" filed by BNSF on Schedule 14A
under Rule 14a-12.
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