Sort of related here.
Mexican agency OKs KCS purchase of railroad stake
Kansas City Business Journal - October 6, 2004
Print this Article Email this Article Reprints RSS Feeds Most Viewed Most Emailed
A Mexican agency has approved Kansas City Southern's new application to buy Mexican partner Grupo TMM's interest in their jointly owned Mexican railroad, TFM.
Warren Erdman, KC Southern's vice president of corporate affairs, said Wednesday that approval by Mexico's Foreign Investment Commission was required for a foreign company to become a majority owner of a Mexican railway company. The commission's approval will remain valid until Oct. 5, 2005.
Before that deadline, KC Southern (NYSE: KSU) hopes to negotiate the purchase of Grupo TMM's 48.4 percent share of Grupo TFM, the holding company that owns TFM. KC Southern owns 46.6 percent of Grupo TFM, and the Mexican government owns the rest.
KC Southern hopes to buy a controlling interest in TFM and combine it with its U.S. railroads under a new name: Nafta Rail.
"This is very good news for us," Erdman said. "It means the Mexican government has approved our investment in the controlling interest in TFM. Now we will be working with TMM to hopefully close on that deal."
KC Southern thought it had a deal in April 2003, when TMM agreed to sell its controlling interest in TFM for $412 million and its interest in the Texas-Mexican Railway Co. (Tex-Mex), a short-line railroad that connects the Kansas City Southern Railway with TFM, for $32.7 million.
TMM officials reversed themselves in August 2003, calling off both deals. But TMM agreed to sell Tex-Mex on Aug. 16 of this year.
Around the same time, a U.S. arbitration panel found the TFM purchase contract to be valid and directed TMM to work with KC Southern in good faith to complete the sale.
"We, too, are pleased by the decision, which is another important step in our efforts to complete a transaction with KCS," TMM Chairman Jose Serrano said in a written release.
KC Southern ranks No. 16 on The Business Journal's list of area public companies
One of the small ironies of allowing Mexican trucks to travel thoughout the U.S. (I'm not sure if they've started yet) was the fact that most (if not all) of the largest Mexican trucking companies were bought by U.S. firms in anticipation.