(The following report appeared on the Kansas City Star website on September 25.)
KANSAS CITY — Kansas City Southern this morning said it is paying $54.1 million to resolve claims and disputes related to the acquisition of its unit in Mexico.
In a news release, the railroad holding company said it has entered into a settlement agreement with Grupo TMM, S.A., and terminated several contractual relationships to resolve recent claims and disputes over escrows established in 2005 as part of its acquisition of Grupo TFM, S.A. de C.V., now Kansas City Southern de Mexico.
Kansas City Southern will pay TMM $54.1 million in cash to retire two escrows currently valued at approximately $86.6 million and to settle all claims between the two parties.
Without this settlement, KCS could have owed an additional payout from an escrow of $40 million in 2010, payable in Kansas City Southern shares.
“We are pleased with the settlement because it avoids any possibility of a larger future payout to TMM and future dilution of KSU shares,” Kansas City Southern Chairman and Chief Executive Officer Michael R. Haverty said in the release.
In trading today, Kansas City Southern shares gained 2 cents and closed at $32.61.