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Canadian National to resume buyback after abandoning Kansas City deal

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·1 min read
FILE PHOTO: A Canadian National Railway (CN Rail) train moves through wooden pallets beside an encampment of the Tyendinaga Mohawk Territory
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(Reuters) -Canadian National Railway Co said on Friday it would resume a previously approved share buyback, days after walking away from its $29.6-billion deal for U.S. railroad operator Kansas City Southern.

The largest Canadian railroad expects to complete the remaining C$1.1 billion ($869.02 million) of share repurchases by the end of January next year, it said in a statement.

The company, under fire from some investors for its failed bid to buy Kansas City Southern, said it was targeting C$700 million of operating income improvements in 2022 by increasing labor productivity and reviewing its non-rail businesses.

It reaffirmed its 2021 targets of a double-digit increase in adjusted earnings per share and free cash flow.

Canadian National's abandonment of its approach for Kansas City Southern allowed rival Canadian Pacific Railway Ltd to cement a deal to buy the U.S. peer and create the first direct railway linking Canada, the United States and Mexico.

($1 = 1.2658 Canadian dollars)

(Reporting by Shreyasee Raj; Editing by Aditya Soni)