Grupo México to acquire Florida East Coast Railway
USA: On March 28 Grupo México announced that its transport business GMéxico Transportes had reached an agreement to acquire Florida East Coast Railway Holdings Corp from Fortress Investment Group. The Mexican company said adding FEC to its existing operations in Texas would ‘immediately establish GMXT as an important railroad owner in the United States’.
Completion of the all-cash transaction is subject to meeting closing conditions including government approvals.
GMXT’s Ferromex has a network of more than 10 000 track-km in Mexico, serving major industrial and commercial zones as well as eight seaports and six border crossings. It handles around 1·4 million wagonloads/year.
FEC has a 560 km network with connections to CSX and Norfolk Southern in Jacksonville. It handles 550 000 wagonloads/year for a diverse mix of intermodal, aggregate, automotive, chemicals, metals and lumber customers.
‘The acquisition of FEC is an important strategic addition to our North American transportation service offering’, said GMXT President & CEO Alfredo Casar. ‘Our acquisition of the FEC will significantly enhance the scope, scale and diversification of our service.’
FEC President & CEO Jim Hertwig said his team looked forward to working with GMXT ‘to grow our business, execute our key strategic initiatives and take advantage of new opportunities.’
BBVA Bancomer and Credit Suisse served as financial advisors to GMXT, and Dechert and Galicia as legal advisors. Barclays and Morgan Stanley were financial advisors to FEC, with Cravath, Swaine & Moore and Sidley Austin acting as legal advisors.
- Brightline told Railway Gazette that its plans to launch an inter-city passenger service between Miami, Fort Lauderdale and West Palm Beach this year would not be affected by the GMXT deal. 'Brightline is a separate company that has dual ownership of the corridor and the right to operate passenger service', said a spokesperson. 'We have all shared operations-related agreements in place with the Florida East Coast Railway for us to fully build out and implement our passenger rail system.'