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Rail News: Kansas City Southern

Done deal: KCS completes TFM transaction, names interim CEO for TFM


On April 1, Kansas City Southern officially completed its long and winding journey to acquire the controlling interest in TFM S.A. de C.V. from Grupo TMM S.A.

KCS now owns all of Grupo Transportacion Ferroviaria Mexicana S.A. de C.V.’s common stock and controls all TFM shares entitled to full voting rights.

"This is an historic opportunity to create one of North America's premier railroads," said KCS Chairman, President and Chief Executive Officer Michael Haverty in a prepared statement. "TFM, Kansas City Southern Railway and The Texas Mexican Railway Company will now operate under common overall leadership, creating a seamless transportation system that spans the heart of North America."

The three-railroad union has "several inherent advantages for Mexico and the entire NAFTA region, including greater investment in cross-border transportation infrastructure, the implementation of advanced cargo tracing and tracking systems, improved border security, and world-class employee training programs," according to the KCS statement. The long-term result? "More employment opportunities and greater overall competitiveness in Mexico," KCS officials believe.

For many, one of the keys to sealing the deal was ensuring that TFM would remain a Mexican corporation with Mexican leadership. To that end, Vicente Corta Fernandez assumed the duties of "TFM interim CEO" on April 1.

A partner in law firm White & Case S.C., Corta has represented both public and private-sector clients. In his new position Corta — whose professional resumé doesn’t include railroad experience — reports directly to the TFM board, which Haverty chairs.

Corta also will continue to serve as a White & Case partner during his TFM tenure.

"Vicente Corta is a skilled negotiator and a natural leader," said Haverty. "He comes to TFM as part of a distinguished career in government and private business. We will all look to Vicente for leadership and guidance as we work together to take TFM to the next level."

Before joining White & Case, Corta served as President of Mexico's National Commission for the Retirement Savings System (CONSAR). Prior to that, he was CEO of the Institute for Protection of Bank Savings (IPAB), Mexico's deposit insurance and bank resolution agency until August 2000. At IPAB, he took “aggressive and effective steps” to reform and overhaul Mexico's banking system, including overseeing the orderly resolution of about $38 billion worth of assets from troubled banks and directing the government takeover of several of Mexico's unstable banks, according to KCS. And before heading the IPAB, Corta held posts at the Mexican Ministry of Finance and Public Credit for almost a decade.

Meanwhile, the search for a permanent TFM CEO continues. Corta is a candidate, says KCS spokeswoman Doniele Kane.

Contact Progressive Railroading editorial staff.

More News from 4/4/2005