Grupo Mexico, operator of Mexico's largest rail network, has acquired the parent company of Florida East Coast Railway (FEC) in a move that will expand Grupo Mexico's U.S. presence, the two companies said today.
FEC will be acquired in an all-cash deal, the companies said. The purchase price was a reported $2 billion. Grupo Mexico, which owns the Ferromex and Ferrosur railroads, runs over more than 6,200 miles throughout Mexico. It operates in Texas and at six crossing points on the U.S.-Mexican border.
The statement made no mention as to whether FEC President and CEO James R. Hertwig would remain with its new owner.
The two railroads combined handle close to 2 million loads per year. FEC, which operates 351 miles of track from Jacksonville to Miami, has carved out a niche in the state by providing service along its east coast, being the exclusive rail provider at the Port of Miami, Port Everglades, and the Port of Palm Beach, and connecting in Jacksonville with eastern rail giants CSX Corp. and Norfolk Southern Corp. to serve about 70 percent of the U.S. with deliveries in 1 to 4 business days.
FEC, headquartered in Jacksonville, is owned by funds managed by affiliates of Fortress Investment Group LLC.