antitrust concerns made the counterbid “illusory and inferior.” Kansas City Southern said it would evaluate the new bid in accordance with its agreement with its original suitor.

mixed reception from freight shippers, who suffered in the last round of consolidation. And we haven’t yet heard from Senator Amy Klobuchar, who heads the antitrust subcommittee and represents key industrial interests in Minnesota.


The public listing of Coinbase, the largest crypto exchange in the U.S., generated a wave of excitement that competitors aim to ride. Among them is Binance.US, the third-ranked domestic crypto exchange, which yesterday named Brian Brooks — formerly Coinbase’s chief counsel and most recently acting U.S. comptroller of the currency — as C.E.O., beginning in May. “There’s a lot of buzz about my former employer, which is well-deserved,” Mr. Brooks told DealBook about Coinbase. “But it’s in everybody’s best interest if there’s more competition.”

Mr. Brooks’ first task is building trust with regulators. He says “managing reputation” is his biggest concern. Binance has shifted its operations throughout Asia since it was founded in 2017, and some say it played fast and loose with rules. The C.F.T.C. was reportedly investigating the company for allowing U.S.-based customers to trade crypto derivatives, which is banned (the agency declined to comment). Mr. Brooks insists he did “a lot” of due diligence on his new employer and dismisses “loose talk” about the exchange flouting regulations.

Binance.US sees potential to lead in undeveloped areas of the American crypto landscape, like derivatives and lending. Mr. Brooks said the company can learn from competitors like Coinbase and Kraken — and challenge them. That is, if he can convince regulators to bless its efforts to bring crypto into the financial mainstream, a preoccupation of players across the industry.


Yesterday, JPMorgan Chase’s co-heads of investment banking, Jim Casey and Viswas Raghavan, announced policies aimed at improving working conditions amid record deal volume and banker burnout. The company has attempted similar things before. DealBook spoke with Mr. Casey about the latest plan — and whether this one will stick.

JPMorgan has recently hired 65 analysts and 22 associates, and plans to add another 100 junior bankers and support staff, Mr. Casey said. It’s targeting bankers at rival firms, as well as lawyers and accountants interested in a career switch.

similar efforts to protect junior bankers’ hours in 2016, but “it wasn’t stringently enforced,” Mr. Casey said. Why not? “Laziness.” This time, junior bankers’ hours and feedback will figure in senior manager performance evaluation and compensation.

“It’s not a money problem,” Mr. Casey said, so there won’t be one-time checks or free Pelotons after a rush. Junior bankers will get their share of the record $3 billion in fees JPMorgan earned in the first quarter.

Some things won’t change. Because banking is a client-service job, managers sometimes have limited control over workloads and hours. “You might do 100 deals a year, but that client only does one deal every three years,” Mr. Casey said.

How the bank will measure success: “Ask me what our turnover ratio has gone to and I will tell you,” Mr. Casey said. The goal, he said, is “lower.”

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Canadian National Railway Outbids Rival for Kansas City Southern

The railroad barons are at it again.

Canadian National Railway on Tuesday offered to buy Kansas City Southern for $33.7 billion, topping a $29 billion bid put forward last month by a rival railroad operator, Canadian Pacific.

The competing offers underline the riches expected to come from trade flows after the United States-Mexico-Canada Agreement was passed into law last year. A merger with either suitor would create a railroad line that stretches from Canada to Mexico. In the already consolidated railroad industry, few lines are left to bid on — let alone deals that will be approved by regulators.

Canadian National said in a letter to Kansas City board that the company had spent “considerable time and resources analyzing a potential combination of our two companies.” It argues its offer represents “an unparalleled opportunity to create a premier railway for the 21st century.”

The offer gives Kansas City Southern a valuation 21 percent higher than Canadian Pacific’s bid, which had been agreed on by the companies’ boards.

track agreements extending to the Gulf of Mexico.

The rival bid is one further challenge to Canadian Pacific’s offer, which was already facing regulatory scrutiny. The U.S. Department of Justice has urged the Surface Transportation Board — which must approve the offer — to examine the deal under tough industry guidelines put in place in 2001 and expressed concern over its use of a voting trust that would it allow it close the deal even before getting regulatory approval.

Canadian Pacific has argued that there should be no regulatory trouble, given the two railroads have no overlap and in some cases create new markets. It said its smaller size compared with other major North American railroads should exempt it from the guidelines.

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$29 Billion Railroad Merger to Connect U.S., Mexico and Canada

Canadian Pacific and Kansas City Southern announced plans on Sunday to combine in a $29 billion deal that would create the first railroad network connecting the United States, Mexico and Canada.

It is an effort to capitalize on the trade flows expected to run through the three countries after President Donald J. Trump signed the United States-Mexico-Canada Agreement into law last year. It’s also a bet on the strength of the industrial economy as the United States rebounds from the pandemic.

Canadian Pacific links major ports on the East and West Coasts between the United States and Canada, while Kansas City Southern connects the United States, Mexico and Panama. The two connect on a single point: a joint facility in Kansas City, Mo., where Kansas City Southern is based.

“This deal just has so many longer-term strategic advantages,” Kansas City Southern’s chief executive, Patrick J. Ottensmeyer, said in an interview. “Our board really saw the value in putting these two companies together right now.”

$208 a share offer from the Blackstone Group, a private equity firm, that Kansas City Southern rebuffed last year. Shares of Kansas City are up 12 percent year-to-date, while shares of Canadian Pacific have climbed almost 10 percent.

The boards of both companies have unanimously approved the cash-and-stock deal, which is expected to close by the middle of 2022, subject to customary approvals.

The railroad industry can be viewed as a bellwether of industrial activity; it expects to benefit from a growing U.S. economy as it emerges from the pandemic. The Federal Reserve has signaled optimism for the nation’s economic outlook, and President Biden signed a $1.9 trillion spending bill into law this month.

in his annual letter.

The railroad executives on Sunday highlighted other opportunities they see in the deal. Mr. Creel called the merger a “compelling opportunity to take trucks off the road” at a time when the United States is focused on a transition to a greener economy. It also reduces risks in the global supply chain after a pandemic that highlighted its weaknesses, Mr. Ottensmeyer said.

The deal needs approval from the Surface Transportation Board, a division of the Department of Transportation, which has previously acknowledged concerns that railroad consolidation has led to service issues for shippers. Canadian Pacific’s past efforts to acquire U.S. railroads have failed, in part because of such concerns. That includes talks with CSX Corporation in 2014 and Norfolk Southern in 2016. And the Biden administration has already signaled a tougher stance on antitrust scrutiny.

Because of its size, Kansas City Southern is exempt from guidelines put in place in 2001 to tighten deal scrutiny in the industry. The combined company would still be the smallest of the remaining six largest freight railroads operating in the United States. The two railroads have no overlap, Mr. Creel and Mr. Ottensmeyer said — and, in some cases, the transaction will create new markets.

“There’s zero other deals that represent the uniqueness of this deal,” Mr. Creel said.

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