friscobob
April 22nd, 2003, 05:24 AM
KCS and TMM Announce Agreements Placing TFM, Texas Mexican Railway
and The Kansas City Southern Railway Under Common Control
KANSAS CITY, Mo.--(BUSINESS WIRE)--April 21, 2003--Kansas City
Southern (KCS)(NYSE: KSU) and Grupo TMM, S.A. (Grupo TMM)(NYSE: TMM)
today announced a series of agreements that have been approved by
their respective boards of directors, that will, following shareholder
and regulatory approval, place The Kansas City Southern Railway
Company (KCSR), the Texas Mexican Railway Company (Tex-Mex), and TFM,
S.A., de C.V. (TFM) under the common control of a single
transportation holding company, NAFTA Rail, to be headquartered in
Kansas City, Missouri. As part of the transaction, KCS will change its
name to NAFTA Rail, which will trade on the New York Stock Exchange
(NYSE).
The common control of The Kansas City Southern Railway Company and
the Texas Mexican Railway under NAFTA Rail would require approval of
the Surface Transportation Board in the United States. Additionally,
the acquisition of Grupo TFM shares by NAFTA Rail would require the
approval of the Competition Commission and the Foreign Investment
Commission in Mexico.
"Common control of these three railroads, which are already
physically linked in an end-to-end configuration, will enhance
competition and give shippers in the NAFTA trade corridor a strong
transportation alternative as they make their decisions to move goods
between the United States, Mexico and Canada," said Michael R.
Haverty, chairman, president, and chief executive officer of KCS. "KCS
already owns KCSR and has significant investments in Tex-Mex and TFM,
so these agreements are just a natural business progression offering
KCS and Grupo TMM shareholders greater value through the operating
efficiencies that will come from common ownership and control."
Jose Serrano, chairman and chief executive officer of Grupo TMM,
said: "These transactions will be pro-competitive and allow Mexico to
strengthen its position in the North American economy. NAFTA Rail will
provide a viable rail alternative, while still preserving existing
competitive gateways at the border between Mexico and the United
States."
"I am very pleased that we have been able to complete these
agreements and that they have been approved by the boards of both
companies. We believe that the shareholders of both companies will
benefit from bringing these three companies under common ownership,"
said Serrano. "Both NAFTA Rail and Grupo TMM will continue to work
closely together in the future and have agreed to enter into a
marketing agreement to further our shared goals of providing
end-to-end transportation for our customers."
Mr. Haverty will serve as chairman, president, and chief executive
officer of NAFTA Rail. Mr. Serrano will serve as vice chairman of
NAFTA Rail and chairman of TFM, while also joining the NAFTA Rail
board of directors along with Javier Segovia, president of Grupo TMM.
The remainder of the 10-person board will be made up of existing KCS
directors. Mario Mohar will remain as chief executive officer of TFM.
Under the Grupo TFM acquisition agreement, TMM Mulitimodal, a
subsidiary of Grupo TMM, will receive 18 million shares of NAFTA Rail
representing approximately 22 percent (20% voting, 2% subject to
voting restrictions) of the company, $200 million in cash and a
potential incentive payment of between $100 million and $180 million
based on the resolution of certain future contingencies.
Grupo TFM owns 80 percent of the common stock of TFM and all the
shares entitled to full voting rights. The Mexican Government owns the
remaining 20% of TFM. TFM holds the concession to operate Mexico's
Northeast Rail Lines for 50 years ending June 2047, and has the option
to extend the concession for an additional 50 years. The TFM rail
network consists of more than 2,600 miles of main track.
KCSR will remain headquartered in Kansas City, Missouri; Tex-Mex
in Laredo, Texas; and TFM in Mexico City.
and The Kansas City Southern Railway Under Common Control
KANSAS CITY, Mo.--(BUSINESS WIRE)--April 21, 2003--Kansas City
Southern (KCS)(NYSE: KSU) and Grupo TMM, S.A. (Grupo TMM)(NYSE: TMM)
today announced a series of agreements that have been approved by
their respective boards of directors, that will, following shareholder
and regulatory approval, place The Kansas City Southern Railway
Company (KCSR), the Texas Mexican Railway Company (Tex-Mex), and TFM,
S.A., de C.V. (TFM) under the common control of a single
transportation holding company, NAFTA Rail, to be headquartered in
Kansas City, Missouri. As part of the transaction, KCS will change its
name to NAFTA Rail, which will trade on the New York Stock Exchange
(NYSE).
The common control of The Kansas City Southern Railway Company and
the Texas Mexican Railway under NAFTA Rail would require approval of
the Surface Transportation Board in the United States. Additionally,
the acquisition of Grupo TFM shares by NAFTA Rail would require the
approval of the Competition Commission and the Foreign Investment
Commission in Mexico.
"Common control of these three railroads, which are already
physically linked in an end-to-end configuration, will enhance
competition and give shippers in the NAFTA trade corridor a strong
transportation alternative as they make their decisions to move goods
between the United States, Mexico and Canada," said Michael R.
Haverty, chairman, president, and chief executive officer of KCS. "KCS
already owns KCSR and has significant investments in Tex-Mex and TFM,
so these agreements are just a natural business progression offering
KCS and Grupo TMM shareholders greater value through the operating
efficiencies that will come from common ownership and control."
Jose Serrano, chairman and chief executive officer of Grupo TMM,
said: "These transactions will be pro-competitive and allow Mexico to
strengthen its position in the North American economy. NAFTA Rail will
provide a viable rail alternative, while still preserving existing
competitive gateways at the border between Mexico and the United
States."
"I am very pleased that we have been able to complete these
agreements and that they have been approved by the boards of both
companies. We believe that the shareholders of both companies will
benefit from bringing these three companies under common ownership,"
said Serrano. "Both NAFTA Rail and Grupo TMM will continue to work
closely together in the future and have agreed to enter into a
marketing agreement to further our shared goals of providing
end-to-end transportation for our customers."
Mr. Haverty will serve as chairman, president, and chief executive
officer of NAFTA Rail. Mr. Serrano will serve as vice chairman of
NAFTA Rail and chairman of TFM, while also joining the NAFTA Rail
board of directors along with Javier Segovia, president of Grupo TMM.
The remainder of the 10-person board will be made up of existing KCS
directors. Mario Mohar will remain as chief executive officer of TFM.
Under the Grupo TFM acquisition agreement, TMM Mulitimodal, a
subsidiary of Grupo TMM, will receive 18 million shares of NAFTA Rail
representing approximately 22 percent (20% voting, 2% subject to
voting restrictions) of the company, $200 million in cash and a
potential incentive payment of between $100 million and $180 million
based on the resolution of certain future contingencies.
Grupo TFM owns 80 percent of the common stock of TFM and all the
shares entitled to full voting rights. The Mexican Government owns the
remaining 20% of TFM. TFM holds the concession to operate Mexico's
Northeast Rail Lines for 50 years ending June 2047, and has the option
to extend the concession for an additional 50 years. The TFM rail
network consists of more than 2,600 miles of main track.
KCSR will remain headquartered in Kansas City, Missouri; Tex-Mex
in Laredo, Texas; and TFM in Mexico City.