(The Associated Press circulated the following article on June 27.)
MEXICO CITY — Mexican mining and railroad company Grupo Mexico said Monday it would contest the antitrust ruling against the merger of its railway Ferromex with Ferrosur, a railway partly controlled by the world’s third-wealthiest man, Carlos Slim.
“We still believe we can fight it,” Juan Rebolledo, Grupo Mexico’s vice president for international affairs, told Dow Jones Newswires. “It would be a loss of competition in the railway industry.”
Last week, the Federal Competition Commission, or CFC, rejected the merger, which would join Ferrosur and Ferromex under Grupo Mexico’s infrastructure and transport unit ITM.
Conglomerate Grupo Carso SA and financial concern Grupo Financiero Inbursa SA, controlled by billionaire Slim, agreed last year to sell Ferrosur to Grupo Mexico for a 25 percent stake in railway unit ITM.
Grupo Mexico is considering appealing the decision to the CFC and may also challenge it through the court system, Rebolledo said.
The company hasn’t been given the reasons behind the commission’s decision yet and expects to receive the resolution Friday, he added.
In the meantime, Grupo Mexico will continue to operate Ferrosur, he said, though it hasn’t made any moves to integrate the two rail companies yet.
“Until we see the resolution, we don’t know if we have to do something about that,” said Rebolledo.
Grupo Mexico argues that industry leader Ferromex needs to merge with Ferrosur to compete, given the advantages of a seamless network between the U.S. and Mexico that Kansas City Southern, or KCS, enjoys since it bought out TFM, Mexico’s other privatized railway, last year.
KCS, however, argues that the Ferromex-Ferrosur merger would hurt competition and give Grupo Mexico dominance in certain regions of the country, including Mexico City and the port of Veracruz on the oil-rich Gulf Coast.