Canadian National Railway appears to be the front-runner to acquire Kansas City Southern Railroad after the KCS board of directors said CN has presented a “superior proposal” to an earlier offer from Canadian Pacific to purchase the U.S.-based railway. The CN proposal totals $33.6 billion and includes assumption of nearly $3.8 billion in KCS debt. Canadian National also is offering to pay a $700 million breakup fee for which KCS would be liable for terminating its March 24 deal with Canadian Pacific. Canadian Pacific’s agreement was worth nearly $29 billion, including debt. Kansas City Southern’s board said it will break the deal with CP and enter into a new agreement with CN, but CP still has a few days to respond. Canadian Pacific has long insisted that its offer — even at a lower price — is superior since it stands a better chance of winning approval from regulators in Canada and Mexico, as well as the U.S. Surface Transportation Board.

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