Tuesday, March 28, 2017

Ferromex dealing for Florida East Coast Railway

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Just weeks after acquiring Florida East Coast Industries (FECI), parent of Florida East Coast Railway (FECR), a Japanese hedge fund is close to a deal to sell the regional carrier to Ferromex, Mexico’s largest railroad by mileage, for a reported $2 billion.

Grupo Mexico, the mining conglomerate that owns 74% of Ferromex (Union Pacific owns the remaining 26%), is finalizing the details of a deal for FECR with FECI owner Fortress Investment Group, which was acquired by Japan’s Softbank in February.

Ferromex won out in an auction for FECR, according to Reuters, and a deal could be announced as early as this week.

Jacksonville-based Florida East Coast Railway operates 351 miles of track along the eastern coast of Florida. It was taken private by Fortress in 2007 for $3.5 billion. It also operates All Aboard Florida, parent of Brightline, an intercity/higher-speed passenger rail operation running on FEC tracks set to begin service this summer. Brightline will remain under Fortress ownership.

The multinational sale comes at a precarious time for relations between Mexico and the United States. President Donald Trump campaigned on promises to build a wall between the U.S. and its southern neighbor, and the Administration has already begun actions to tighten enforcement of laws aimed at restricting the flow of illegal immigrants from Mexico. Trump has also proposed dismantling NAFTA (North American FreeTrade Agreement) and imposing tarriffs on goods Mexico exports to the U.S.

 

 

 

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