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Rail News Home Rail Industry Trends

1/30/2002



Rail News: Rail Industry Trends

Fusión: Mexico's Ferromex, Ferrosur seek merger


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While most North American Class Is continue to cultivate marketing and/or other service alliances with freight-rail partners, two of Mexico's main trunk lines are choreographing a merger two-step.

Grupo México, majority owner of 4,636-mile Ferrocaril Mexicano S.A. de C.V. (Ferromex) and Grupo Carso S.A. de C.V., which owns 922-mile Ferrosur S.A. de C.V., Jan. 25 announced they intend to merge their respective rail operations.

The transaction is subject to approval from the key Mexican government agencies — Secretaria de Comunicaciones Y Transportes, and Comisión Federal de Competencia — and approval won’t be a slam dunk.

While both roads serve Mexico City, the merger essentially would be an end-to-end one. In operation as a private company since February 1998, Ferromex serves the Mexico City-Guadalajara-Monterrey economic triangle, and offers service to and from the U.S.-Mexico border cities of Mexicali, Nogales, Ojinga, Ciudad Juarez and Piedras Negras. It also serves four ports on the Pacific Coast (Guaymas, Topolobampo, Mazatlan and Manzanillo) and two on the Gulf Coast (Tampico and Altamira). Grupo México owns 74 percent of Ferromex; Union Pacific Railroad, 26 percent.

Ferrosur links the Mexico City Terminal (Terminal Ferroviaria del Valle de Méxicio) with the Gulf ports of Veracruz and Coatzacoalcos; through the Port of Coatzacoalcos, Ferrosur also can link with the Yucatan Peninsula, the U.S. East Coast and South America.

Last year, Ferrosur entered into a joint venture with International Shipholding Corp. subsidiary CG Railway Inc. to move containers via 60 rail-car capacity vessels that sail between ports in Coatzacoalcos and Mobile, Ala.

— Pat Foran


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