By Justin Franz 

KANSAS CITY — Kansas City Southern announced Saturday that it had entered into negotiations with Canadian National about a potential merger. 

Last week, CN made a surprise $33.7 billion offer to purchase KCS, a month after Canadian Pacific announced it would buy it for $29 billion. In a press release, KCS’ board noted that “there can be no assurance that the discussions with CN will result in a transaction.”

The talks are in line with the agreement KCS forged with CP that allows the railroad to engage in discussions with other suitors if it gets what it believes is a “superior proposal.” As part of the talks between KCS and CN, the American-based road will provide CN with nonpublic information.

On Saturday, CP officials said they fully supported KCS’ decision to engage with CN but believed that their offer was ultimately the best deal for shareholders. 

“We fully support the board of KCS in reviewing CN’s offer,” said CP President and CEO Keith Creel. “We are confident through this process that they will recognize this unsolicited bid is fraught with challenges, uncertainties and regulatory risks that are not present in the seamless, pro-competitive and pro-service CP-KCS combination.”