(Reuters circulated the following article on May 9.)
MEXICO CITY — Mexico’s biggest rail operator, Grupo TMM, said on Friday it had completed the sale of 51 percent of stock in Mexrail, its main freight line to the U.S. border, to U.S. railroad Kansas City Southern Industries Inc.
The stock was placed into an independent voting trust pending approval by the U.S. Surface Transportation Board to put the rail line under common control of Kansas City Southern Railway Co., the Texas Mexican Railway Co., and TFM, S.A. as previously announced, TMM said in a news release. Texas Mexican Railway is a U.S. railroad partly owned by Kansas City Southern.
In a deal announced last month, Kansas City Southern Industries will change its name to NAFTA Rail, which will be a U.S.-listed holding company. Kansas City Southern will pay $412 million in cash and equity to Grupo TMM for its stake in Mexican railroad Grupo TFM.
Kansas City Southern held a minority interest in Mexrail through its 39 percent interest in TFM, which wholly owned Mexrail before the transaction. The purchase gave Kansas Southern 51 percent of Mexrail, but its controlling ownership will remain in trust pending approval by the Surface Transportation Board of the common control application.
Kansas City Southern will have the option of purchasing the remaining 49 percent of Mexrail from TFM.
TFM has a concession to operate through the year 2047 the sole Mexican freight line to Laredo, Texas. Laredo is by far the busiest U.S. entryway for Mexican rail freight.