(The following article by Randolph Heaster was posted on the Kansas City Star website on November 30.)
KANSAS CITY — A federal regulator has approved Kansas City Southern’s request to acquire majority interest in a short-line railroad linking its own system with Mexico’s biggest railroad.
The U.S. Surface Transportation Board gave its permission for Kansas City Southern to purchase controlling interest in the Texas Mexican Railway Co. on Monday, Kansas City Southern said. The agency also approved Kansas City Southern taking control of the U.S. portion of the international rail bridge at Laredo, Texas.
The approval is part of Kansas City Southern’s proposal to buy a majority stake in Grupo TFM, Mexico’s biggest railroad, to create a transnational carrier to be called Nafta Rail. Kansas City Southern and its Mexican partner, Grupo TMM, have jointly owned TFM since 1997.
Kansas City Southern and TMM are negotiating terms of the sale of TFM to Kansas City Southern while the process to obtain regulatory approval in both countries proceeds.
“We are very pleased that the STB has approved our application to control Tex Mex and the U.S. side of the Laredo Bridge,” Michael R. Haverty, Kansas City Southern’s chairman and chief executive, said in a statement.
“This approval will allow us to move forward with our effort to bring better, more competitive rail service to NAFTA shippers in the NAFTA trade corridor as well as provide better rail service in south Texas.”
The regulatory approval becomes effective in a month.