Western Railroad Discussion > Ferromex and Ferrosur deal once again rejected

From Reuters:

MEXICO CITY, Nov 10 (Reuters) - Mexico's anti-trust commission rejected mining company Grupo Mexico's planned merger of two railroad subsidiaries on Friday.

It is the second time the commission has blocked the fusion of Ferromex and Ferrosur, which would have created Mexico's largest rail firm. Grupo Mexico had appealed a June ruling that the merger would be anti-competitive.

Grupo Mexico bought Ferrosur from Mexican magnate Carlos Slim in 2005 in a deal worth $307 million. Together, Ferromex and Ferrosur would control 54 percent of the Mexican railroad market.

In December, the Mexican subsidiary of U.S. rail firm Kansas City Southern (KSU.N: Quote, Profile, Research) presented a formal complaint to the anti-trust commission arguing the merged company would control of important routes and squeeze out competition.

Grupo Mexico has not been officially informed of the decision, but said it may challenge the ruling in court.

"There are several possible resources open to us, including an injunction before federal tribunals," said Grupo Mexico's head of international affairs Juan Rebolledo.

Stock in Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research), one of the world's top copper producers, was down 3.91 percent to 38.10 on Friday as prices for the red metal slid and on strike fears at a company refinery in Peru.

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Seems a bit hypocritical after allowing the KCS-TFM deal, but then again we're talking about the Mexican government which is far from being consistent! Makes me wonder if this now makes Ferromex more likely to sell a majority stake to the UP to compete with the KCS-TFM?

Aaron

AC4400CWGEVO Wrote:
-------------------------------------------------------
> From Reuters:
>
> MEXICO CITY, Nov 10 (Reuters) - Mexico's
> anti-trust commission rejected mining company
> Grupo Mexico's planned merger of two railroad
> subsidiaries on Friday.
>
> It is the second time the commission has blocked
> the fusion of Ferromex and Ferrosur, which would
> have created Mexico's largest rail firm. Grupo
> Mexico had appealed a June ruling that the merger
> would be anti-competitive.
>
> Grupo Mexico bought Ferrosur from Mexican magnate
> Carlos Slim in 2005 in a deal worth $307 million.
> Together, Ferromex and Ferrosur would control 54
> percent of the Mexican railroad market.
>
> In December, the Mexican subsidiary of U.S. rail
> firm Kansas City Southern (KSU.N: Quote, Profile,
> Research) presented a formal complaint to the
> anti-trust commission arguing the merged company
> would control of important routes and squeeze out
> competition.
>
> Grupo Mexico has not been officially informed of
> the decision, but said it may challenge the ruling
> in court.
>
> "There are several possible resources open to us,
> including an injunction before federal tribunals,"
> said Grupo Mexico's head of international affairs
> Juan Rebolledo.
>
> Stock in Grupo Mexico (GMEXICOB.MX: Quote,
> Profile, Research), one of the world's top copper
> producers, was down 3.91 percent to 38.10 on
> Friday as prices for the red metal slid and on
> strike fears at a company refinery in Peru.
>
> Rgds
> Ac4400cwgevo
> http://www.trainsondvd.biz