KCS Purchase of TFM

Ed M Dec 15, 2004

  1. Ed M

    Ed M Passed away May 2012 In Memoriam

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    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.
     
  2. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    I keep wondering- When all is said and done, what will be the fate of the Texas-Mexican? Will it eventually be absorbed into the KCS RR? Or is there something that would prevent such a move?

    :D

    Boxcab E50
     
  3. slambo

    slambo TrainBoard Member

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  4. me

    me New Member

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    hi , ive had this train since i was a little kid and i would like to know more about it if someone could help me with this i would enjoy the kindness. ive got the engine which is black and on back driver and pass side has the #'s 5208 on it.I also have what i guess is a coal cart or something that says BALTIMORE AND OHIO on driver and pass side of it. On the bottom of the engine it reads RSO atest z-75157 MEHANOTEHNIKA IZOLA and under that it says made in YUGOSLAVIA.The bottom of the coal cart just reads made in yugoslavia. i know nothing about trains just wondering about this one. if you need to know what it looks like i can tell u .I got the train in the mid 80's so its not to old i dont think. thank you sorry if this might be the wrong site let me know and i wont leave such long letters
     
  5. Don Rickle

    Don Rickle TrainBoard Supporter

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    [ January 08, 2006, 06:07 AM: Message edited by: Don Rickle ]
     
  6. Stourbridge Lion

    Stourbridge Lion TrainBoard Supporter

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    Welcome to TrainBoard!!!!!!!

    [​IMG] [​IMG] [​IMG] [​IMG] [​IMG]
     
  7. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    ME-

    Welcome to Train Board!

    You might try placing this post in our "Inspection Pit" Forum. Probably would be the best fit for your question. And possibly would bring more response.

    :D

    Boxcab E50
     
  8. r_i_straw

    r_i_straw Staff Member

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    Tom Stolte captured a "Smurf" today in Kansas City.
    [​IMG]
     
  9. chessie

    chessie TrainBoard Supporter

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    Interesting unit... no dynamic brakes

    Harold
     
  10. Ed M

    Ed M Passed away May 2012 In Memoriam

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    Neat. I see they haven't got around to patching it for KCSdeM yet.


    Regards

    Ed
     
  11. Ed M

    Ed M Passed away May 2012 In Memoriam

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    Funny thing, that's #1408 in Smurf paint scheme up in Kansas City. I just read a post on MexList that reported that #1409, also in Smurf blue, was seen in Los Angeles yesterday. It was in a consist with NS #9339 on point, with TFM #1431 (not sure of paint scheme) and UP #3903.

    Regards

    Ed
     
  12. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    Is there going to be an official paint scheme for this new entity?

    [​IMG]

    Boxcab E50
     
  13. Ed M

    Ed M Passed away May 2012 In Memoriam

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    Yeah, the same gray as KCS, just like the gray that TFM used. Even the logo looks like the KCS logo, see:
    http://www.tfm.com.mx/

    These blue ones are old locos inherited from FNM (NdeM) that they never got around to repainting.


    Regards

    Ed
     
  14. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    Will they still be lettered "TFM?" Or perhaps KCS, and sublettered on the cabs?

    Actually, the KCS gray isn't too bad. Looks better than the mess of bNsF.......

    I'd imagine that KCS will start to phase out older equipment, and upgrade the fleet?

    [​IMG]

    Boxcab E50
     
  15. Ed M

    Ed M Passed away May 2012 In Memoriam

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    No, they'll be lettered for KCSdeM. TFM no longer exists.

    I'm not sure we know exactly how they'll look, best guess seems to be with KCS on the long hood, maybe sublettered KCSdeM, and using the KCSdeM logo.

    I'd imagine that KCS will start to phase out older equipment, and upgrade the fleet?

    They've been doing that all along. The name and logo change has just come about since they finally aquired 100% control.

    Regards

    Ed
     
  16. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    Please let us know when you spot a KCSdeM engine. So we can see how they do it.

    :D

    Boxcab E50
     

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