KC Southern takes buyout from Canadian National Railway

A Canadian National Rail locomotive moves through the rail yard in Dartmouth, Nova Scotia, on Thursday, March 29, 2018. Canadian National sweetened its offer to buy Kansas City Southern railroad Thursday, May 13, 2021, and derailed rival Canadian Pacific's bid for the railroad that handles traffic in the United States and Mexico. (Andrew Vaughan/The Canadian Press via AP)

NEW YORK (AP) - Kansas City Southern has abandoned its agreement to be acquired by Canadian Pacific, choosing instead a competing bid from Canadian National Railway with a bigger price tag, but also greater regulatory risks.

The decision Friday comes one day after Canadian Pacific said that it wasn't budging from its initial $25 billion buyout agreement made in March, even after Kansas City Southern said that a richer $33.6 billion bid from Canadian National appeared to be superior.

Canadian Pacific has consistently argued that a tie-up between Kansas City and Canadian National would have trouble getting approved by antitrust regulators and as recently as Thursday, said that it would not boost its original offer. Canadian Pacific has asserted that their combination with Kansas City Southern is most likely to get a green light from regulators.