(KCS issued the following news release on January 25.)
KANSAS CITY, Mo — Today, Grupo TMM, S.A. and Kansas City Southern announced that the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) for the Amended and Restated Acquisition Agreement (AAA) has expired without a formal request from the U.S. Department of Justice (DOJ) for additional information of documentary material. This allows KCS and TMM to consummate the transaction without an antitrust challenge from DOJ and to bring The Kansas City Southern Railway Company, The Texas Mexican Railway Company and TFM, S.A. de C.V. under the common control of KCS.
“We are pleased that the U.S. Department of Justice has again allowed the transaction to proceed without a request for additional information and without a challenge under the antitrust laws,” said Michael R. Haverty, KCS chairman, president and chief executive officer. “We believe that this transaction will enhance rail competition in the United States and Mexico, enhancing service for shippers in the North American trade corridor.”
On December 15, 2004, KCS and TMM announced that the companies had entered into the AAA whereby TMM will sell its 51 percent voting interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM) to KCS for $200 million in cash, 18 million shares of KCS common stock, $47 million in a two-year promissory note, and up to $110 million payable in a combination of cash and KCS common stock upon successful resolution of the current proceedings related to the VAT Claim and the Put with the Mexican Government. The $47 million promissory note and a portion of the $110 million contingent payment will be subject to certain escrow arrangements to cover potential indemnification claims.
With the completion of the HSR process, KCS shareholder approval of the issuance of the shares to TMM required under the AAA remains the final step to completion of the proposed transaction. The Securities and Exchange Commission is currently reviewing KCS’ draft amended proxy statement.
Headquartered in Mexico City, TMM is a Latin American multimodal transportation company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. Visit TMM’s web site at http://www.grupotmm.com and TFM’s web site at http://www.tfm.com.mx. Both sites offer Spanish/English language options.
KCS is a transportation holding company that has railroad investments in the United States, Mexico and Panama. Its primary domestic holdings include The Kansas City Southern Railway Company (KCSR), founded in 1887 and The Texas Mexican Railway Company, founded in 1885. Headquartered in Kansas City, Mo., KCSR serves customers in the central and south central regions of the United States. KCS’ rail holdings and investments, including TFM, S.A. de C.V., are primary components of a NAFTA Railway system that links the commercial and industrial centers of the United States, Canada and Mexico. Visit KCS at www.kcsi.com.