Grupo Mexico Signs Rail Accord With Kansas City Southern
February 10 2010 - 1:35AM
Dow Jones News
Mexican mining and railway company Grupo Mexico SAB (GMEXICO.MX)
said Tuesday it has signed an agreement with Kansas City Southern
de Mexico, or KCSM, on interconnection and rights of way between
the two railroad operators.
In a filing with the Mexican stock exchange, Grupo Mexico said
the accord, which includes the cities of Guadalajara, Monterrey and
Aguascalientes, settles a dispute between the two companies. KCSM,
a unit of Kansas City Southern (KSU) runs one of Mexico's three
main railways, while Grupo Mexico operates the other two through
Ferromex and Ferrosur.
The accord sets the rates that the companies must pay each other
for interconnection and rights of way on each other's rails and
terminals.
"The signing of this accord puts an end to the legal
controversies between the two sides regarding these matters," Grupo
Mexico said. The company said KCSM has also signed an agreement
with Ferrosur that increases KCSM's access in the central states of
Puebla and Tlaxcala and the Gulf coast port of Veracruz. As a
result of the accord, KCSM agreed to withdraw its objections to the
merger of Ferrosur into Grupo Mexico's transport and infrastructure
division ITM, which also includes Ferromex, Grupo Mexico said.
The objections led to a probe by the federal antitrust
commission, which ruled against the 2005 merger and levied fines
against Ferromex, Ferrosur and their owners--Grupo Mexico,
conglomerate Grupo Carso (GPOVY) and a unit of Grupo Financiero
Inbursa (GFINBUR.MX)--prompting an appeal by the companies.
Grupo Mexico said Tuesday it expects the accord with KCSM to
increase the efficiency and competitiveness of the Mexican
railways, and that the case of the merger can be resolved favorably
as a result.
-By Anthony Harrup, Dow Jones Newswires, (5255) 5890 5176,
anthony.harrup@dowjones.com
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