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Grupo Mexico to buy Florida East Coast Railway $2.1 billion
March 28, 2017 / 4:17 PM / 8 months ago

Grupo Mexico to buy Florida East Coast Railway $2.1 billion

MEXICO CITY (Reuters) - Mexican miner Grupo Mexico (GMEXICOB.MX) said on Tuesday it had agreed to acquire Florida East Coast Railway for $2.1 billion, a rare acquisition that comes as U.S. President Donald Trump has been trying to renegotiate trade ties between the two countries.

Trump has threatened to renegotiate the North American Free Trade Agreement, a treaty that has been a boon to the region’s rail freight operators, which seamlessly shuttle car parts, grains and beer back and forth across the region’s borders.

Grupo Mexico’s transport unit financed the purchase from Fortress Investment Group with $1.75 billion in debt and $350 million in capital, the company said in a statement to the Mexican stock exchange.

The announcement confirmed a Reuters report on Monday about the pending acquisition and the company’s ambition to manage foreign assets after dominating the railway freight sector in Mexico for years.

Florida East Coast Railway “is a unique and irreplaceable asset with 565 miles of track that offers rail services along Florida’s east coast,” the statement said.

The purchase is subject to government approval.

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.

(The story corrects to state that Grupo Mexico has agreed to acquire FECR, and day of previous story to Monday from Tuesday)

Reporting by David Alire Garcia; Editing by David Gregorio and Lisa Von Ahn

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