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Rail News: Kansas City Southern

KCS/Grupo TMM's NAFTA Rail plan passes U.S. antitrust scrutiny

On Aug. 1, Kansas City Southern and Grupo TMM S.A. de C.V. announced the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 had expired for their proposed NAFTA Rail transaction without U.S. Department of Justice (DOJ) requesting additional information.

DOJ had 30 days to seek various documents and information tied to antitrust laws, but that period expired July 31.

"We are very gratified that the U.S. Department of Justice has determined to allow the transaction to proceed," said Mike Haverty, KCS chairman, president, and chief executive officer, in a prepared statement. "This is one more step in our effort to make NAFTA Rail a strong competitor in the NAFTA trade corridor."

KCS and Grupo TMM previously received approval from the Mexican Competition Commission for their plan, under which The
Kansas City Southern Railway Co., TFM S.A. de C.V., Gateway Eastern Railway Co. and The Texas Mexican Railway Co. would be commonly controlled by NAFTA Rail, a Kansas City, Mo.-based holding company.

The plan still must be approved by Mexico's Foreign Investment Commission, Surface Transportation Board (regarding affected U.S. railroads), both companies' shareholders and Grupo TMM bondholders.

On July 31, Haverty and KCS Executive Vice President and Chief Operating Officer Gerald Davies testified at a STB public hearing along with NAFTA Rail-supporting representatives from U.S. Department of Agriculture, Watco Cos. Inc., Triangle Marine Industrial Park, Bartlett
Co., Beachner Grain Inc., E. I. du Pont de Nemours and Co., Martin Product Sales L.L.C. and MeadWestvaco Corp.

The board plans to issue a final decision on the plan Oct. 17.

Contact Progressive Railroading editorial staff.

More News from 8/4/2003