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KANSAS CITY SOUTHERN INDUSTRIES, INC. AND MIDSOUTH CORPORATION PROPOSE MERGER

 KANSAS CITY SOUTHERN INDUSTRIES, INC.
 AND MIDSOUTH CORPORATION PROPOSE MERGER
 KANSAS CITY, Mo., Sept. 21 /PRNewswire/ -- Kansas City Southern Industries, Inc. (NYSE: KSU) a holding company which owns the Kansas City Southern Railway Company (KCSR), headquartered in Kansas City, and MidSouth Corporation (NASDAQ: MSRR), a regional railroad holding company headquartered in Jackson, Miss., announced today that they have signed a definitive merger agreement whereby KCSI will acquire MidSouth. The acquisition, which has been unanimously approved by the boards of directors of both companies, is subject to customary conditions, including approval by the MidSouth shareholders, and to exemption or approval by the Interstate Commerce Commission (ICC).
 The agreement provides that the holders of MidSouth common stock will receive $20.50 per share in cash, resulting in a total acquisition price of approximately $219.3 million. KCSI will finance the acquisition with existing funds and resources. KCSI believes the transaction will result in no dilution in earnings of KCSI common stock holders and there will be operating and marketing synergies resulting from the combination of the two railroads.
 The parties intend to seek shareholder approval and regulatory clearances as soon as practicable. It is anticipated that the transaction will be subject to normal labor protective conditions. The agreement provides for a termination fee of $7.875 million which is payable if either party materially breaches certain obligations under the agreement or if MidSouth completes another acquisition transaction pursuant to the exercise of its fiduciary responsibilities.
 KCSR, a Class 1 common carrier railroad system, is a major wholly- owned subsidiary of KCSI. KCSI 1991 revenues were approximately $610 million and it has total assets of approximately $1.1 billion. KCSR operates over approximately 2,500 total track miles and provides service in eight midwestern and southern states. KSCR 1991 revenues were approximately $322 million and it has total assets of approximately $626 million.
 MidSouth Corporation is a railroad holding company with four wholly- owned rail subsidiaries operating over approximately 1,200 total track miles in Louisiana, Mississippi, Alabama and Tennessee. It interchanges directly with seven Class 1 railroads. MidSouth 1991 revenues were approximately $92 million and it has total assets of approximately $262 million.
 MidSouth has approximately 10.3 million primary shares outstanding. KCSI has previously acquired 500,300 shares, or 4.9 percent, of the outstanding shares of MidSouth.
 The two systems currently connect with each other at Shreveport and Winnfield, La., but do not directly serve any of the same customers. Both KSCR and MidSouth originate or terminate approximately 90 percent of their respective traffic. A combination of the two lines will provide a more direct link between the western and southwestern shipping markets and the southeastern and eastern markets by creating a single line system between Dallas/Fort Worth on the west and Birmingham, Ala., and Meridian, Miss., on the east. MidSouth directly services Meridian and is expected to begin serving Birmingham via trackage rights Oct. 1, 1992.
 George W. Edwards, Jr., president and chief executive officer of KCSR, said, "The strength of this merger is that it's truly a win-win for both companies, their respective shareholders, employees and customers. It's a splendid fit with KCSR in that MidSouth and KCSR are not competing lines but rather are 'end-to-end' connecting lines. I'm confident we will see significant synergies resulting in both cost efficiencies and in more efficient movement of traffic. That we have reached this agreement today is a high tribute to Mark Levin and his management team at MidSouth. Mark and his colleagues formed MidSouth in 1986. In but six short years, they have created and grown MidSouth into the valuable and healthy railroad that it is today. It has first class management and employee team and I'm looking forward to a long and profitable association with them."
 In commenting on the agreement, Mark M. Levin, MidSouth chairman and chief executive officer, said, "MidSouth is very proud to become part of the Kansas City Southern Industries family of companies. KCS management is committed to the reinvestment in track and equipment that is necessary to meet our customers' requirements for the long term. KCS management also has the respect for its employees and concern for their future that results in a motivated and committed workforce. These factors lead us to believe that our long-term corporate goals will be significantly advanced by the transaction to which we have agreed today."
 -0- 9/21/92
 /CONTACT: George Edwards, president and CEO, 816-556-0389; Rollie Comstock, senior vice president, 816-566-0586, both of KCSR; Joseph Monello, vice president-finance of KCSI, 816-556-0213; Mark Levin, chairman and CEO, 202-466-0510, or John Scotto, vice president/CFO, 601-949-4366, both of MidSouth/
 (KSU MSRR) CO: Kansas City Southern Industries, Inc.; MidSouth Corp. ST: Missouri, Mississippi IN: TRN SU: TNM


SM-LR -- NY022 -- 1572 09/21/92 10:21 EDT
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Date:Sep 21, 1992
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