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Filing under Rule 425
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Filer: Burlington Northern Santa Fe Corporation
Companies that are the subject of the filing:
Canadian National Railway Company
North American Railways, Inc.
Registration Statement No. 333-94397
[LOGO OF BNSF] ROBERT D. KREBS Burlington Northern Santa Fe Corporation
Chairman and Chief 2650 Lou Menk Drive
Executive Officer Fort Worth, Texas 76131
March 1, 2000
Dear Fellow Shareholder:
In my letter last month, I explained how we are working to create added value
for Burlington Northern Santa Fe (BNSF) shareholders. In this letter, I want to
update you on recent developments regarding our strategic initiative to combine
BNSF with Canadian National Railway Company (CN) to establish the preeminent
North American railroad.
Since our December 20th announcement, we have been meeting with customers,
employees, elected officials and the financial community to explain the
compelling benefits of this end-to-end, pro-competitive combination. At the
same time, we remain focused on our day-to-day business of serving shippers,
operating an efficient and on-time railroad, and growing our revenues.
The opportunity of combining BNSF with CN is only possible today because both
railroads are in strong financial positions and are providing superior customer
service following successful mergers. We believe now is the time for us to
create a new railroad that will give shippers efficient, single-line service to
most major markets in North America as well as extending our intermodal system
to compete more effectively with long-haul trucking services.
As you've also probably heard, some of the other large railroads have voiced
predictable and self-serving concerns about the timing of the proposed BNSF/CN
combination. We have also heard from shippers voicing legitimate concerns about
competitive alternatives and the effect our cross-border combination will have
on pricing and service levels.
We understand the concerns of shippers given the serious service problems
created by some other recent rail mergers. However, as we have been explaining
to all of our constituencies, this combination is very different. It is an end-
to-end combination. No routes will be eliminated and there's very little
overlap. BNSF and CN already have common transportation information systems and
both companies recently have successfully completed mergers. The anticipated
organizational structure will preserve each company's identity and customer
focus. At the same time, we will be able to provide unified billing, tracking
and tracing; more efficient asset utilization and equipment availability; and
better customer service.
To allay the concerns of shippers, BNSF and CN recently announced that we would
guarantee shippers equal or better rail service over our railroads after we are
combined. We also will guarantee route options for shippers which means
existing gateways will remain open after the merger becomes effective. Today,
BNSF and CN lead the industry in on-time performance. If we don't measure up
after we are combined, we will make it right for shippers. We are also
guaranteeing a service alternative for the very few shippers who would otherwise
end up with one rather than two railroad options.
In an increasingly global marketplace, shippers need faster and more consistent
transportation service to stay competitive -- and by combining with CN, we will
stay ahead of the curve by providing unmatched single-line service throughout
North America.
In light of the concerns raised by shippers and other organizations about recent
rail consolidations following the announcement of our proposed combination with
CN, the U.S. Surface Transportation Board (STB) will hold a public hearing March
7-10 on the impact of rail consolidations on the present and future structure of
our industry. Paul Tellier, CN's CEO, and I will testify on March 7.
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We have already filed a petition with the STB proposing a 365-day schedule to
provide more time than recent reviews of major railroad combinations. We will
file a joint application with CN in late March for STB approval of our
combination. We currently expect shareholder meetings to be held in April and
to complete the transaction in mid-2001. I will continue to keep you updated as
events unfold.
Sincerely,
/s/ ROBERT D. KREBS
Robert D. Krebs
Chairman and Chief Executive Officer
Any statements in this letter concerning future economic performance or business
outlook, predictions or expectations of financial or operational results or
synergies, and other expressions as to matters which are not historical facts,
are "forward-looking statements" within the meaning of the federal securities
laws. Forward-looking statements involve a number of risks and uncertainties
that could cause actual results to differ materially from those projected in
those statements. Important factors that could cause such differences include,
but are not limited to, general economic downturns, which may limit demand and
pricing; changes in fuel prices; labor matters and stoppages, which may affect
the costs and feasibility of operations; competition and commodity
concentrations, which may affect traffic and pricing levels; severe weather
conditions and natural occurrences such as floods and earthquakes; regulatory
and political developments, including the process of, or conditions imposed in
connection with, obtaining regulatory and Canadian court approvals for the
proposed combination with Canadian National Railway Company (CN); and the
ability of the combined companies to realize the synergies expected as a result
of the proposed combination. The Company assumes no obligation to update
forward-looking information to reflect actual results or changed assumptions or
other factors. We refer you to the documents that BNSF files from time to time
with the U.S. Securities and Exchange Commission (SEC), such as reports on Form
10-K, Form 10-Q, and Form 8-K, and the registration statement for the securities
to be issued in the proposed combination that has been filed by North American
Railways, Inc. and CN referred to in the following paragraph (and in particular
to "Cautionary Statement Concerning Forward-Looking Statements" and "Risk
Factors" in the registration statement), which contain additional important
factors that could cause results to differ from current expectations and the
forward-looking statements contained in this letter.
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. The registration statement has not been declared effective.
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.
