A Sale and a Partnership Derailed
Dec 8, 2003
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 Mexico’s most important railroad. Mike Haverty,
chairman, president and chief executive officer of Kansas City, had
struck a deal to buy out his company’s 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 Mexico.
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 TMM’s 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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