NEWS RELEASE - JULY 19, 1994
KANSAS CITY SOUTHERN INDUSTRIES, INC. ANNOUNCES
ILLINOIS CENTRAL AGREES IN PRINCIPLE TO ACQUIRE KANSAS CITY SOUTHERN RAILWAY

Illinois Central Corporation (NYSE: IC) and Kansas City Southern Industries,
Inc. (NYSE:  KSU) jointly announced today that they have signed a letter of
intent providing for the acquisition by Illinois Central Corporation of the
Kansas City Southern Railway and certain related assets.  The Kansas City
Southern Railway is a subsidiary of Kansas City Southern Industries.

The acquisition will be accomplished by a merger of Illinois Central
Corporation and Kansas City Southern Industries, Inc. immediately following
the spin-off by Kansas City Southern Industries to its shareholders of the
stock of a subsidiary holding its financial services businesses, which consist
principally of DST Systems, Inc. and the Janus Capital Corporation.  The
acquisition, which is subject to receipt of a favorable Internal Revenue
Service ruling, the negotiation of definitive documentation and a shareholder
vote of both companies, is expected to be completed in the first half of 1995.

Illinois Central Corporation will account for this transaction as a purchase. 
Since the definitive agreements remain to be negotiated, there can be no
assurance that a transaction will ultimately be consummated.

Kansas City Southern Industries' shareholders will receive, on a tax-free
basis, a distribution of approximately 21.2 million shares of Illinois Central
Corporation common stock and stock of a company which will hold shares of
Kansas City Southern Industries' non-rail operations.  In addition, the letter
of intent anticipates that Illinois Central Corporation will assume
approximately $929 million of Kansas City Southern Industries' indebtedness
and provide $6 million to purchase its preferred stock.

The combination of the Illinois Central Railroad and the Kansas City Southern
Railway will, under the common control of Illinois Central Corporation, create
an important rail network which will serve 14 midwestern and southern states
and link the geographical markets of Chicago, New Orleans, Memphis, Kansas
City, Port Arthur, Dallas and Birmingham.  The combined railroads will have
revenues in excess of $1 billion and a greatly expanded geographic reach. 
Currently, the two railroads serve primarily different geographic markets with
no meaningful overlap in route systems.  Kansas City Southern Railway provides
north/south service between Kansas City and Beaumont/Port Arthur/Lake Charles,
while the Illinois Central Railroad serves the Chicago to New Orleans
corridor.  The proposed transaction will create more competitive alternatives
for the two railroads' customers.  Kansas City Southern Railway's customers
will gain improved access to the northeast, and Illinois Central Railroad's
customers will enjoy improved access to the west, southwest and southeast. 
The combination will enhance the corridors of service linking Chicago with
Dallas and the southeast, enabling the railroads to expand their service to
the growing intermodal markets.  The railroads will have a balanced commodity
base with coal, chemicals, lumber/paper and grain, in addition to intermodal.

To complete the acquisition, the Illinois Central Railroad will be placed in
trust pending Interstate Commerce Commission approval of the common control of
the two railroads.  The companies are confident that this transaction will be
approved by the Interstate Commerce Commission and expect the approval process
to be completed within a year from submission of an application.

At the closing of the transaction, E. Hunter Harrison, currently the Illinois
Central Railroad's President and Chief Executive Officer, will become
President and Chief Executive Officer of the Kansas City Southern Railway, and
Gerald Mohan will become President and Chief Executive Officer of the Illinois
Central Railroad with John McPherson, as Chief Operating Officer.  Mr. Mohan
currently is Senior Vice President-Marketing of the Illinois Central Railroad
and has been affiliated with the company for more than 34 years.  Mr.
McPherson is currently Senior Vice President-Operations of the Illinois
Central Railroad.  Gilbert H. Lamphere will retain his position as Chairman of
the Illinois Central Corporation, which will be the parent company of both
railroads upon completion of the acquisition.  Illinois Central expects that
Kansas City Southern Railway's employees and key management will continue to
be involved in the operation of that railroad.

Mr. Lamphere said, "This transaction presents a unique opportunity to create
additional value for the Illinois Central and Kansas City Southern
shareholders.  We believe that by combining a disciplined focus on efficient
and low cost operations, a broadened and balanced commodity base and greatly
expanded service area, we will have substantial revenue growth and increased
profitability."

Mr. Harrison added, "This is an important addition to our twin objectives of
continued revenue growth and generating attractive returns on invested
capital.  The acquisition of the Kansas City Southern Railway extends the
geographic reach of both railroads, enhancing our position with our customers
as the most efficient and effective means of transportation."  Harrison added
the following specific points supporting the rationale:

- - -    Kansas City Southern Railway has achieved annual compound growth in
     carloadings during the last five years of approximately 6% (excluding
     intermodal), a trend we believe we can continue to build upon given
     Kansas City Southern Railway's strong industrial base.

- - -    The initiation of a disciplined scheduled service will dramatically
     improve our service offerings and permit future revenue opportunities.

- - -    The configuration of our railroads will permit more direct routings of
     customer traffic providing increased revenue opportunities.

- - -    The Kansas City Southern Railway has spent almost $350 million in
     capital expenditures in the last three years.  This well-maintained
     plant will permit future capital expenditures to be reduced.

- - -    Cost improvements can be achieved in a variety of areas, including
     elimination of duplicative administrative functions, consolidation of
     locomotive fleets, more efficient use of yards and other operating
     efficiencies, all designed to ensure that the railroads will remain
     among the most profitable in the U.S.

Landon H. Rowland, President and Chief Executive Officer of Kansas City
Southern Industries, Inc., commented, "The combination of the two railroads is
a tremendous opportunity for Kansas City Southern Industries' shareholders,
employees and customers.  By adopting the best of both railroads, we can offer
greater financial strength for our shareholders, better service for our
customers and the improved opportunities for our employees that come with
growth.  At the same time excellent growth opportunities for our financial
services operations will be greatly enhanced.  Both our transaction processing
and asset management businesses have excellent market positions with exciting
prospects for improved revenue and earnings.  Our plans are to pursue these
opportunities vigorously."

Illinois Central is being advised by The Bridgeford Group and Simpson Thacher
& Bartlett.  Kansas City Southern Industries' advisors are CS First Boston
Corporation; Watson, Ess, Marshall & Enggas and Proskauer Rose Goetz &
Mendelsohn.

Illinois Central Corporation is a holding company whose principal subsidiary,
Illinois Central Railroad, operates 2,700-mile freight railroad in six states
between Chicago and the Gulf of Mexico.

Kansas City Southern Industries, Inc. is a holding company, one of whose
principal subsidiaries, The Kansas City Southern Railway, operates a 2,700-
mile main line freight railroad in 11 states, principally between Kansas City
and Port Arthur, Texas, and between Dallas and Birmingham, Alabama and serves
principal ports in the Gulf of Mexico.