NAFTA Rail: KCS suffers setback as Grupo TMM shareholders reject TFM sale (8/19/2003)
8/19/2021On Aug. 18, Grupo TMM S.A. announced its shareholders unanimously rejected the sale of the company's interest in TFM S.A. de C.V. to Kansas City Southern, dealing a blow to KCS' NAFTA Rail plan. Under acquisition agreement terms, Grupo TMM stockholder approval is required.
KCS "remains committed to completing the transaction," and is exploring its agreement rights, and legal options under U.S. and Mexican law, according to a prepared statement.
"Jose Serrano, chairman of Grupo TMM, who signed and obligated TMM to the transaction agreements with KCS and who, in his capacity as a director of TMM, recommended approval of the transaction to TMM shareholders, is the controlling stockholder of Grupo TMM," KCS officials said. "KCS intends to pursue all appropriate legal or administrative action against any persons or entities involved in interfering with KCS and its agreements with TMM."
Grupo TMM's board expects to meet as soon as possible to review the company's options, TMM officials said.
In April, Grupo TMM agreed to sell KCS its 38.4 percent stake in TFM for $412 million, including $200 million cash. KCS plans to place TFM, The Kansas City Southern Railway Co., The Texas Mexican Railway Co. and Gateway Eastern Railway Co. under the common control of NAFTA Rail, a Kansas City, Mo.-based holding company.
Mexico's Competition Commission has approved the plan and the Foreign Investment Commission expects to issue a ruling on or before Aug. 28. Surface Transportation Board plans to rule on NAFTA Rail's U.S. transactions Oct. 17.
Source: Progressive Railroading Daily News