Ed M
December 15th, 2004, 08:42 PM
Got this off another board this morning. Looks like the deal continues to move forward.
KANSAS CITY, Mo. & MEXICO CITY--Dec. 15, 2004--Kansas City Southern
(NYSE:KSU) ("KCS") and Grupo TMM, S.A. (NYSE:TMM) and (BMV:TMMA) ("TMM")
announced today that the companies have entered into an amended acquisition
agreement whereby TMM will sell its 51 percent voting interest in Grupo
Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM") to KCS for $200
million in cash, 18 million shares of KCS common stock, $47 million in a
two-year promissory note, and up to $110 million payable in a combination of
cash and KCS common stock upon successful resolution of the current proceedings
related to the VAT Claim and the Put with the Mexican Government. The $47
million promissory note and a portion of the $110 million contingent payment
will be subject to certain escrow arrangements to cover potential
indemnification claims. The boards of directors of both companies have approved
the transaction.
As part of the transaction, KCS will also enter into a three-year
consulting contract with a consulting firm controlled by Jose Serrano Segovia.
KCS and TMM have also agreed that upon completion of the transaction all
litigation between the two companies will be dismissed.
Consummation of the transaction remains subject to the satisfaction of
certain conditions, including KCS shareholder approval. TMM's controlling
shareholders have entered into a voting trust providing for approval of the
transaction.
Both the Mexican Foreign Investment Commission and the Mexican Federal
Competition Commission have approved acquisition of the controlling interest in
TFM by KCS. Although KCS and TMM previously satisfied the requirements of the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, that authorization
has expired and the parties have agreed to file the required information
promptly with the U.S. Department of Justice. This authorization is required
prior to consummation of the transaction.
"We are very pleased to have entered into this amended agreement with TMM,
and believe it will enhance rail competition and give shippers in the NAFTA
trade corridor a strong transportation alternative in this important and growing
trade corridor," said Michael R. Haverty, chairman, president and chief
executive officer of KCS. "This transaction, along with our recently approved
control of The Texas Mexican Railway Company, offers our shareholders greater
value through operating efficiencies and opportunities that will come from
common ownership and control. Our customers, both north and south of the border,
will benefit from these efficiencies as well."
Jose Serrano, chairman and CEO of TMM said, "We're very pleased with the
outcome of the transaction. It creates significant value for all shareholders.
The combination of KCS and TFM creates an efficient shipping route between the
U.S. and Mexico. TMM shareholders will continue to benefit from significant
ownership in this valuable franchise. The net cash proceeds of this transaction
will be used by TMM to reduce its debt obligations. This transaction is truly in
the best interests of TMM shareholders and will ensure long term growth and
flexibility at TMM."
Javier Segovia, president of TMM said, "We are extremely pleased to become
a significant shareholder in KCS, a strong rail alternative between the U.S. and
Mexico. TMM and TFM will continue to work closely, and they have entered into a
marketing agreement to further our shared goals of providing end-to-end
transportation for our customers. In addition, the sale of TFM to KCS puts TMM
on a superior financial footing."
TFM, S.A. de C.V., the operating subsidiary of Grupo TFM, and KCSR will
continue as separate corporations, all under the common control of KCS.
Following consummation of the transaction, KCS will continue to operate under
the KCS name and will maintain its headquarters in Kansas City, Missouri. Grupo
TFM and TFM will remain Mexican corporations, with their corporate headquarters
located in Mexico City. TFM holds the concession to operate Mexico's Northeast
Rail Lines through 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
mainline track. The combined system will exceed 5,300 miles of mainline track.
Morgan Stanley acted as exclusive financial advisor to KCS on the
transaction. J.P. Morgan Securities Inc. and Elek Moreno Valle y Asociados S.A.
acted as exclusive financial advisors to TMM on the transaction.
Headquartered in Mexico City, TMM is a Latin American multimodal
transportation company. Through its branch offices and network of subsidiary
companies, TMM provides a dynamic combination of ocean and land transportation
services. Visit TMM's web site at http://www.grupotmm.com and TFM's web site at
http://www.tfm.com.mx. Both sites offer Spanish/English language options. Grupo
TMM is listed on the New York Stock Exchange under the symbol "TMM" and Mexico's
Bolsa Mexicana de Valores under the symbol "TMM A."
KCS is a transportation holding company that has railroad investments in
the United States, Mexico and Panama. Its primary holding in the United States
is The Kansas City Southern Railway Company. KCS owns 51% of The Texas Mexican
Railway Company, which connects The Kansas City Southern Railway Company and
TFM. Headquartered in Kansas City, Missouri, KCS serves customers in the central
and south central regions of the United States. KCS' rail holdings and
investments are primary components of a NAFTA Railway system that links the
commercial and industrial centers of the United States and Mexico. KCS' web site
is www.kcsi.com. (http://www.kcsi.com.)
KANSAS CITY, Mo. & MEXICO CITY--Dec. 15, 2004--Kansas City Southern
(NYSE:KSU) ("KCS") and Grupo TMM, S.A. (NYSE:TMM) and (BMV:TMMA) ("TMM")
announced today that the companies have entered into an amended acquisition
agreement whereby TMM will sell its 51 percent voting interest in Grupo
Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM") to KCS for $200
million in cash, 18 million shares of KCS common stock, $47 million in a
two-year promissory note, and up to $110 million payable in a combination of
cash and KCS common stock upon successful resolution of the current proceedings
related to the VAT Claim and the Put with the Mexican Government. The $47
million promissory note and a portion of the $110 million contingent payment
will be subject to certain escrow arrangements to cover potential
indemnification claims. The boards of directors of both companies have approved
the transaction.
As part of the transaction, KCS will also enter into a three-year
consulting contract with a consulting firm controlled by Jose Serrano Segovia.
KCS and TMM have also agreed that upon completion of the transaction all
litigation between the two companies will be dismissed.
Consummation of the transaction remains subject to the satisfaction of
certain conditions, including KCS shareholder approval. TMM's controlling
shareholders have entered into a voting trust providing for approval of the
transaction.
Both the Mexican Foreign Investment Commission and the Mexican Federal
Competition Commission have approved acquisition of the controlling interest in
TFM by KCS. Although KCS and TMM previously satisfied the requirements of the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, that authorization
has expired and the parties have agreed to file the required information
promptly with the U.S. Department of Justice. This authorization is required
prior to consummation of the transaction.
"We are very pleased to have entered into this amended agreement with TMM,
and believe it will enhance rail competition and give shippers in the NAFTA
trade corridor a strong transportation alternative in this important and growing
trade corridor," said Michael R. Haverty, chairman, president and chief
executive officer of KCS. "This transaction, along with our recently approved
control of The Texas Mexican Railway Company, offers our shareholders greater
value through operating efficiencies and opportunities that will come from
common ownership and control. Our customers, both north and south of the border,
will benefit from these efficiencies as well."
Jose Serrano, chairman and CEO of TMM said, "We're very pleased with the
outcome of the transaction. It creates significant value for all shareholders.
The combination of KCS and TFM creates an efficient shipping route between the
U.S. and Mexico. TMM shareholders will continue to benefit from significant
ownership in this valuable franchise. The net cash proceeds of this transaction
will be used by TMM to reduce its debt obligations. This transaction is truly in
the best interests of TMM shareholders and will ensure long term growth and
flexibility at TMM."
Javier Segovia, president of TMM said, "We are extremely pleased to become
a significant shareholder in KCS, a strong rail alternative between the U.S. and
Mexico. TMM and TFM will continue to work closely, and they have entered into a
marketing agreement to further our shared goals of providing end-to-end
transportation for our customers. In addition, the sale of TFM to KCS puts TMM
on a superior financial footing."
TFM, S.A. de C.V., the operating subsidiary of Grupo TFM, and KCSR will
continue as separate corporations, all under the common control of KCS.
Following consummation of the transaction, KCS will continue to operate under
the KCS name and will maintain its headquarters in Kansas City, Missouri. Grupo
TFM and TFM will remain Mexican corporations, with their corporate headquarters
located in Mexico City. TFM holds the concession to operate Mexico's Northeast
Rail Lines through 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
mainline track. The combined system will exceed 5,300 miles of mainline track.
Morgan Stanley acted as exclusive financial advisor to KCS on the
transaction. J.P. Morgan Securities Inc. and Elek Moreno Valle y Asociados S.A.
acted as exclusive financial advisors to TMM on the transaction.
Headquartered in Mexico City, TMM is a Latin American multimodal
transportation company. Through its branch offices and network of subsidiary
companies, TMM provides a dynamic combination of ocean and land transportation
services. Visit TMM's web site at http://www.grupotmm.com and TFM's web site at
http://www.tfm.com.mx. Both sites offer Spanish/English language options. Grupo
TMM is listed on the New York Stock Exchange under the symbol "TMM" and Mexico's
Bolsa Mexicana de Valores under the symbol "TMM A."
KCS is a transportation holding company that has railroad investments in
the United States, Mexico and Panama. Its primary holding in the United States
is The Kansas City Southern Railway Company. KCS owns 51% of The Texas Mexican
Railway Company, which connects The Kansas City Southern Railway Company and
TFM. Headquartered in Kansas City, Missouri, KCS serves customers in the central
and south central regions of the United States. KCS' rail holdings and
investments are primary components of a NAFTA Railway system that links the
commercial and industrial centers of the United States and Mexico. KCS' web site
is www.kcsi.com. (http://www.kcsi.com.)