Exhibit 99.1
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GRUPO TMM COMPANY CONTACTS: KANSAS CITY SOUTHERN CONTACTS:
Brad Skinner MEDIA & INVESTORS
Investor Relations William H. Galligan
011-525-55-629-8725 or 203-247-2420 Assistant Vice President Investor
BRAD.SKINNER@TMM.COM.MX Relations
816-983-1551
WILLIAM.H.GALLIGAN@KCSR.COM
PROA/STRUCTURA
Marco Provencio MEXICO
Media Relations Gabriel Guerra
011-525-55-629-8708 and Media Relations
011-525-55-442-4948 011-525-55-273-5359
MP@PROA.STRUCTURA.COM.MX GGUERRA@GCYA.NET
AT DRESNER CORPORATE SERVICES:
Kristine Walczak
(general investors, analysts and media)
312-726-3600
KWALCZAK@DRESNERCO.COM
THE BOARDS OF DIRECTORS OF KCS AND TMM
APPROVE AMENDED ACQUISITION AGREEMENT
Kansas City, MO and Mexico City, Mexico, December 15, 2004 - Kansas City
Southern (NYSE: KSU) ("KCS") and Grupo TMM, S.A. (NYSE: TMM and BMV: TMM A)
("TMM") announced today that the companies have entered into an amended
acquisition agreement whereby TMM will sell its 51 percent voting interest in
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM") to KCS for
$200 million in cash, 18 million shares of KCS common stock, $47 million in a
two-year promissory note, and up to $110 million payable in a combination of
cash and KCS common stock upon successful resolution of the current proceedings
related to the VAT Claim and the Put with the Mexican Government. The $47
million promissory note and a portion of the $110 million contingent payment
will be subject to certain escrow arrangements to cover potential
indemnification claims. The boards of directors of both companies have approved
the transaction.
As part of the transaction, KCS will also enter into a three-year consulting
contract with a consulting firm controlled by Jose Serrano Segovia. KCS and TMM
have also agreed that upon completion of the transaction all litigation between
the two companies will be dismissed.
Consummation of the transaction remains subject to the satisfaction of certain
conditions, including KCS shareholder approval. TMM's controlling shareholders
have entered into a voting trust providing for approval of the transaction.
Both the Mexican Foreign Investment Commission and the Mexican Federal
Competition Commission have approved acquisition of the controlling interest in
TFM by KCS. Although KCS and TMM previously satisfied the requirements of the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, that authorization
has expired and the parties have agreed to file the required information
promptly with the U.S. Department of Justice. This authorization is required
prior to consummation of the transaction.
"We are very pleased to have entered into this amended agreement with TMM, and
believe it will enhance rail competition and give shippers in the NAFTA trade
corridor a strong transportation alternative in this important and growing trade
corridor," said Michael R. Haverty, chairman, president and chief executive
officer of KCS. "This transaction, along with our recently approved control of
The Texas Mexican Railway Company, offers our shareholders greater value through
operating efficiencies and opportunities that will come from common ownership
and control. Our customers, both north and south of the border, will benefit
from these efficiencies as well."
Jose Serrano, chairman and CEO of TMM said, "We're very pleased with the outcome
of the transaction. It creates significant value for all shareholders. The
combination of KCS and TFM creates an efficient shipping route between the U.S.
and Mexico. TMM shareholders will continue to benefit from significant ownership
in this valuable franchise. The net cash proceeds of this transaction will be
used by TMM to reduce its debt obligations. This transaction is truly in the
best interests of TMM shareholders and will ensure long term growth and
flexibility at TMM."
Javier Segovia, president of TMM said, "We are extremely pleased to become a
significant shareholder in KCS, a strong rail alternative between the U.S. and
Mexico. TMM and TFM will continue to work closely, and they have entered into a
marketing agreement to further our shared goals of providing end-to-end
transportation for our customers. In addition, the sale of TFM to KCS puts TMM
on a superior financial footing".
TFM, S.A. de C.V., the operating subsidiary of Grupo TFM, and KCSR will continue
as separate corporations, all under the common control of KCS. Following
consummation of the transaction, KCS will continue to operate under the KCS name
and will maintain its headquarters in Kansas City, Missouri. Grupo TFM and TFM
will remain Mexican corporations, with their corporate headquarters located in
Mexico City. TFM holds the concession to operate Mexico's Northeast Rail Lines
through June 2047, and has the option to extend the concession for an additional
50 years. The TFM rail network consists of more than 2,600 miles of mainline
track. The combined system will exceed 5,300 miles of mainline track.
Morgan Stanley acted as exclusive financial advisor to KCS on the transaction.
J.P. Morgan Securities Inc. and Elek Moreno Valle y Asociados S.A. acted as
exclusive financial advisors to TMM on the transaction.
Headquartered in Mexico City, TMM is a Latin American multimodal transportation
company. Through its branch offices and network of subsidiary companies, TMM
provides a dynamic combination of ocean and land transportation services. Visit
TMM's web site at http://www.grupotmm.com and TFM's web site at
http://www.tfm.com.mx. Both sites offer Spanish/English language options. Grupo
TMM is listed on the New York Stock Exchange under the symbol "TMM" and Mexico's
Bolsa Mexicana de Valores under the symbol "TMM A."
KCS is a transportation holding company that has railroad investments in the
United States, Mexico and Panama. Its primary holding in the United States is
The Kansas City Southern Railway Company. KCS owns 51% of The Texas Mexican
Railway Company, which connects The Kansas City Southern Railway Company and
TFM. Headquartered in Kansas City, Missouri, KCS serves customers in the central
and south central regions of the United States. KCS' rail holdings and
investments are primary components of a NAFTA Railway system that links the
commercial and industrial centers of the United States and Mexico. KCS' web site
is WWW.KCSI.COM.
MEDIA/ANALYSTS CONFERENCE CALL NOTICE:
THERE WILL BE A 1:00 P.M. CENTRAL STANDARD TIME (2:00 P.M. EASTERN STANDARD
TIME) CONFERENCE CALL TODAY, DECEMBER 15, DISCUSSING THE AMENDED ACQUISITION
AGREEMENT HOSTED BY MICHAEL HAVERTY, GERALD DAVIES, RONALD RUSS AND VICENTE
CORTA. A DISCUSSION OF THE AMENDED ACQUISITION AGREEMENT WILL BE AVAILABLE FROM
A LINK ON THE HOME PAGE OF WWW.KCSI.COM. THOSE INTERESTED IN PARTICIPATING ARE
INVITED TO CALL 1-800-955-1795 (U.S. AND CANADA) OR 1-706-643-0096
(INTERNATIONAL). A REPLAY WILL BE AVAILABLE THROUGH DECEMBER 22 AND CAN BE
ACCESSED BY CALLING 1-800-642-1687 (U.S. AND CANADA) OR 1-706-645-9291
(INTERNATIONAL) AND PROVIDING THE CONFERENCE ID 2857442.
INCLUDED IN THIS PRESS RELEASE ARE CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON THE BELIEFS OF TMM'S AND KCS' MANAGEMENT AS WELL AS ON
ASSUMPTIONS MADE. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE INCLUDED IN
SUCH FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED THAT ALL FORWARD-LOOKING
STATEMENTS INVOLVE RISKS AND UNCERTAINTY. FOR ADDITIONAL INFORMATION RELATING TO
SUCH RISKS AND UNCERTAINTIES, READERS ARE URGED TO REVIEW TMM'S AND KCS'
RESPECTIVE FILINGS AND SUBMISSIONS WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
IN CONNECTION WITH THE PROPOSED TRANSACTION, KCS WILL FILE RELEVANT MATERIALS
WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC"), INCLUDING AN AMENDED PROXY
STATEMENT SOLICITING STOCKHOLDER APPROVAL OF CERTAIN ACTIONS IN CONNECTION WITH
THE TRANSACTION. STOCKHOLDERS ARE URGED TO READ THE AMENDED PROXY STATEMENT, AS
WELL AS ANY AMENDMENTS AND SUPPLEMENTS TO THE PROXY STATEMENT (IF AND WHEN THEY
BECOME AVAILABLE) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. STOCKHOLDERS AND
INVESTORS MAY OBTAIN THE AMENDED PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS FREE OF CHARGE AT THE SEC'S INTERNET WEB SITE AT www.sec.gov.
STOCKHOLDERS MAY ALSO OBTAIN FREE OF CHARGE THE AMENDED PROXY STATEMENT AND ANY
OTHER RELEVANT DOCUMENTS BY CONTACTING THE OFFICE OF THE CORPORATE SECRETARY AT
KCS' PRINCIPAL EXECUTIVE OFFICES AT (816) 983-1538. WRITTEN REQUESTS SHOULD BE
MAILED TO P.O. BOX 219335, KANSAS CITY, MISSOURI 64121-9335 (OR IF BY UNITED
PARCEL SERVICE OR OTHER FORM OF EXPRESS DELIVERY TO 427 WEST 12TH STREET, KANSAS
CITY, MISSOURI 64105). SUCH AMENDED PROXY STATEMENT IS NOT CURRENTLY AVAILABLE.
KCS AND ITS DIRECTORS AND EXECUTIVE OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN
THE SOLICITATION OF PROXIES FROM KCS STOCKHOLDERS WITH RESPECT TO APPROVAL OF
CERTAIN ACTIONS IN CONNECTION WITH THE TRANSACTION. INFORMATION REGARDING THESE
DIRECTORS AND EXECUTIVE OFFICERS AND THEIR BENEFICIAL OWNERSHIP INTERESTS IN KCS
CAN BE FOUND IN KCS' PROXY STATEMENT ON SCHEDULE 14A, FILED WITH THE SEC ON
APRIL 5, 2004, IN CONNECTION WITH THE 2004 ANNUAL MEETING OF KCS STOCKHOLDERS.
INVESTORS MAY OBTAIN ADDITIONAL INFORMATION REGARDING THE INTERESTS OF SUCH
PARTICIPANTS BY READING THE AMENDED PROXY STATEMENT FILED IN CONNECTION WITH THE
TRANSACTION WHEN IT BECOMES AVAILABLE.
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