KANSAS CITY SOUTHERN ACQUIRES 51% STAKE IN MEXRAIL

KANSAS CITY SOUTHERN ACQUIRES 51% STAKE IN MEXRAIL

   Kansas City Southern has acquired a 51-percent stake in Mexrail for $32.7 million in cash.

   The Kansas City-based railroad said it has placed the stock into an independent voting trust pending approval by the U.S. Surface Transportation Board of KCS’s common control of the Texas Mexican Railway Co., a wholly owned subsidiary of Mexrail.

   KCS holds an option to acquire the remaining 49 percent of Mexrail from TFM, a company controlled by Grupo TMM.

   Kansas City Southern Railway Co. and the Gateway Eastern Railway Co. already indirectly owned a significant minority interest in Mexrail through its ownership interest in TFM.

   KCS believes the transaction should be treated as a “minor” transaction under current Surface Transportation Board procedures, since it only involves common control of a Class I (Kansas City Southern Railway), Class II (Texas Mexican Railway) and Class III (Gateway Eastern Railway) carrier in an end-to-end manner, with no reductions in the number of carriers serving any customers.