Ferrosur

The Ferrocarril del Sureste ("FERROSUR", AAR reporting mark FSRR) is a railroad that serves the south-eastern regions of Mexico.

The company was formed by the granting of two concessions as part of the privatization of Mexico's railways in 1998 and the susequent merger of those two concessions in 2000. The company operates the vital rail line between Mexico City and Mexico's busiest Gulf of Mexico/Atlantic port at Veracruz.

Ferrosur was owned by Grupo Carso and Grupo Financiero Inbursa (companies controlled by Carlos Slim Helu) until November of 2005 when the company was sold to Grupo Mexico, owner of Ferromex (another of Mexico's Class I railroads) in a US$309 million stock transaction. [FWN Select, "Grupo Mexico Buys Ferrosur Railway From Carso" (Nov. 25, 2005)] The Mexican Federal Competition Commission (CFC) had rejected a proposed 2002 merger of Ferromex and Ferrosur amid opposition from Ferromex competitor, Grupo Transportación Ferroviaria Mexicana (TFM). [FWN Select, "Mexico's Antitrust Agency To Study Railway Merger" (Nov. 28, 2005)]

Following the November 2005 purchase of Ferrosur by Grupo Mexico, Kansas City Southern de México (KCSM), successor to TMF petitioned the Mexican government to block the merger of Ferrosur and Ferromex. The CFC rejected the merger in June of 2006 stating that the merger would have led to excessive concentration in the railroad industry to the detriment of consumers and competing shippers. [FWN Select, "Mexico's Antitrust Commission Rejects Rail Merger Appeal" (Nov. 15, 2006)] The Supreme Court of Justice of the Nation upheld the CFC's rejection of the merger in April of 2007 and the CFC has embarked on investigations into whether the two firms fix prices, agree on which markets each firm will compete in, or cut back supply, and has threatened sanctions against Grupo Mexico for anticompetitive practices. [The America's Intelligence Wire, "Supreme court upholds CFC suspension of Ferromex-Ferrosur merger - Mexico"(April 24, 2007)]

Grupo Mexico has stated that it would consider selling its railroad assets if its litigation to push through the merger of Ferromex and Ferrosur were to fail.

See also

*List of Mexican railroads
*Rail transport in Mexico

External links

* [http://www.ferrosur.com.mx/gxpsites/hgxpp001.aspx FERROSUR Official Site]
* [http://mexlist.com MEXLIST—The Group for Mexican Railway Information]

Notes