A Sale and a Partnership Derailed
One company is high on ambition. The other is deep in
distress. The owners of Mexico’s top railroad now are feuding over
deal gone bad involving a choice asset.
All was on track in August for Kansas City Southern Railroad
to take control of Mexicos most important railroad. Mike
Haverty, chairman, president and chief executive officer of
Kansas City, had struck a deal to buy out his companys
ailing Mexican partner, Grupo Transportación
Marítima Mexicana (TMM), and take over a cross-border
railroad that has become a critical artery linking the US and
TMM, struggling with excessive debt, operating losses and
impatient bondholders, agreed in April to sell its 43% stake in
the railroad, Transportación Ferroviaria Mexicana (TFM),
to Kansas City. The US company already owned 37% of TFM, and
TMMs board promptly gave the sale its blessing. By
August, the deal only required the formality of winning
shareholder approval. It seemed that Haverty, who got his start
in the business working as a brakeman on a Kansas line 40 years
ago, was about to walk off with the...
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