(The Associated Press circulated the following article on October 7.)
KANSAS CITY, Mo. — Mexican regulators have approved Kansas City Southern’s bid to buy the country’s largest railroad company, the companies said.
The decision clears the way for Kansas City Southern to buy all of Transportacion Ferroviaria Mexicana, or TFM, from Mexican transport giant Grupo TMM, the companies said Wednesday. The railroad carries 40 percent of Mexico’s rail freight.
Kansas City Southern, which already held a 37 percent stake in TFM, plans to create a unified company called Nafta Rail. TMM would hold a 22 percent stake in Nafta Rail.
The companies announced the $412 million deal in April 2003. Soon after, TMM shareholders vetoed the deal, citing concerns the deal was too risky, leading Kansas City Southern to file suit.
The two sides declared a truce on litigation earlier this year and in September, extended the deadline of the original purchase agreement to June 15, 2005.
In August, Grupo TMM agreed to sell to Kansas City Southern for $32.7 million its 51 percent share in Mexrail Inc., which owns a short length of track connecting Kansas City Southern’s line with TFM. That deal still requires approval from U.S. transportation officials.