Mexican tribunal OKs Grupo Mexico railroad merger

Mon Mar 28, 2011 10:38pm GMT
 

MEXICO CITY, March 28 (Reuters) - A Mexican tribunal ruled in favor of Grupo Mexico in its fight to merge its two railroad units, throwing out a complaint by competition authorities, the company and the antitrust regulator said on Monday.

Grupo Mexico (GMEXICOB.MX: Quote), which owns copper mines in Mexico, Peru and the United States, also operates Ferromex, Mexico's largest railroad company. In 2005, Grupo Mexico bought another rail line, Ferrosur, through a subsidiary.

Mexico's Federal Competition Commission, or CFC, objected, claiming the purchase would give Grupo Mexico outsized control over the railroad market, but the company disputed the ruling.

A tribunal in Mexico City has sided with Grupo Mexico, although both the company and the CFC say they have not yet been officially notified of the details of the decision.

The ruling signifies "the acquisition of Ferrosur should be understood as definitively approved," according to a statement from the company to the Mexican stock exchange.

A CFC source said the decision was definitive and would be respected, allowing the merger to stand, but regulators are not ruling out the possibility of future action on the case.

Grupo Mexico has floated the idea of launching an IPO for its transportation division after the antitrust dispute is completely settled.

Grupo Mexico's shares closed down 1.03 percent on Monday to 44.11 pesos per share. (Reporting by Mica Rosenberg; Editing by Phil Berlowitz)

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