(Adds comments from Grupo Mexico, background details
MEXICO CITY, March 29 Mexican mining, rail and
infrastructure firm Grupo Mexico said on Wednesday its planned
takeover of Florida East Coast Railway would allow it to expand
its exposure to U.S. rail freight, increase dollar earnings and
diversify revenue sources.
In an analyst call, Grupo Mexico executives said they
expected the $2.1 billion deal, which is subject to government
approval, to close within 60 to 90 days.
They said the company, which owns Ferrocarril Mexicano
(Ferromex), Mexico's largest railroad operator, is always open
to acquisition opportunities but had no imminent plans for a
long-delayed initial public offering of its rail unit.
The planned acquisition comes at a sensitive time for
relations between the United States and Mexico, following a
pledge by U.S. President Donald Trump to renegotiate the North
American Free Trade Agreement and tighten immigration controls.
Grupo Mexico said Florida East Coast Railway has the "highest
revenue per track mile of any major railroad in North America"
and offers a direct connection between the nation's class I
railroads and Florida's largest freight markets.
It said the expansion of the Panama Canal should consolidate
Florida as a key gateway to North America.
Based in Jacksonville, Florida East Coast Railway operates a
351-mile (565-km) freight rail system located along the east
coast of Florida, employs more than 1,200 people and has a fleet
of 73 locomotives and some 4,290 cars.
Grupo Mexico, one of the world's largest copper producers,
together with Kansas City Southern de Mexico and Ferrovalle,
control more than 72 percent of the Mexican rail freight market.
Grupo Mexico and Kansas City Southern de Mexico together have a
75 percent stake in Ferrovalle.
Earlier this month, Mexico's antitrust watchdog criticized
Grupo Mexico and Kansas City Southern de Mexico for using their
rail freight market share to fix prices, restrict supply and
impede access to their networks.
(Reporting by Gabriel Stargardter and Veronica Gomez;
Additional reporting by Anthony Esposito; Editing by Bill Trott)