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Yesterday, Kansas City Southern and Grupo TMM S.A. announced the Mexican Foreign Investment Commission (FIC) approved KCS' new application for authority to acquire TMM's interest in TFM S.A. de C.V. The approval — necessary for a foreign firm to become a majority owner of a Mexican company — remains valid until Oct. 5, 2005.

Last month, the FIC denied KCS' application to acquire the TFM interest.
Calling that decision "not in the spirit of the North American Free Trade Agreement nor consistent with previous [FIC] decisions on foreign majority ownership, including ownership of another railroad in Mexico," KCS and TMM officials said they would try to convince FIC members to reconsider their decision. Their persuasive efforts paid off.

"We are pleased by this decision and believe it is consistent with previous decisions by the FIC," said KCS Chairman, President and Chief Executive Officer Mike Haverty in a prepared statement. "This is an important step forward, as authorization of the FIC is critical for the completion of a transaction."

Last month, KCS and TMM officials agreed to extend the deadline of their April 2003 acquisition agreement — calling for TMM to sell its 38.4 percent TFM stake to KCS — until June 15, 2005, to provide additional time to complete a transaction.

"We, too, are pleased by the decision, which is another important step in our efforts to complete a transaction with KCS," said TMM Chairman Jose Serrano.