Ferromex’s owner nears deal to acquire Florida East Coast Railway

The owner of Ferrocarril Mexicano (Ferromex), Mexico’s largest railroad operator, is nearing a deal to acquire Florida East Coast Railway for more than $2 billion, including debt.

The potential deal shows that Ferromex’s parent, Mexican mining conglomerate Grupo Mexico , is now seeking to apply its railroad operating expertise to foreign assets after dominating the railway freight sector. The acquisition would come at a sensitive time for relations between the United States and Mexico, following a pledge by U.S. President Donald Trump to renegotiate the North American Free Trade Agreement and tighten immigration controls. Grupo Mexico has prevailed in an auction for Florida East Coast Railway and is now negotiating final terms with the U.S. regional railroad’s owner, Fortress Investment Group LLC

If the negotiations are completed successfully, a deal could be announced as early as this week, the people added, asking not to be identified because the sale process is confidential. Fortress declined to comment. Ferromex, Grupo Mexico and Florida East Coast Railway did not immediately respond to requests for comment.

Based in Jacksonville, Florida East Coast Railway operates a 351-mile (565-km) freight rail system located along the east coast of Florida. Fortress took Florida East Coast Railway private in 2007 for $3.5 billion. Fortress, an investment firm with $69.6 billion in assets under management as of the end of December, agreed last month to sell itself to Japan’sSoftBank Group Corp for $3.3 billion.

Grupo Mexico, one of the world’s largest copper producers, together with Kansas City Southern de Mexico and Ferrovalle, control more than 72 percent of the Mexican rail freight market. Grupo Mexico and Kansas City Southern de Mexico together have a 75 percent stake in Ferrovale. Earlier this month, Mexico’s antitrust watchdog criticized Grupo Mexico and Kansas City Southern de Mexico for using their rail freight market share to fix prices, restrict supply and impede access to their networks.

CDOT Commuter Locomotives To Be Overhauled

MT. VERNON, Ill. — National Railway Equipment will overhaul six Connecticut Department of Transportation GP40-2H locomotives, according to an NRE press release.

The release states that NRE will produce over 90 percent of the locomotive content in house. The company guarantees delivery of the locomotives within 450 days of receipt from CDOT.

The six commuter units were manufactured for CDOT in 1996 in Montreal, Quebec, by AMF Technotransport. AMF used six former CSX GP38s and GP40s built between 1967 and 1971 — of Baltimore & Ohio, Chesapeake & Ohio, and Clinchfield heritage — for the project. All received 3000-h.p. EMD model 645 prime movers, and a separate Head End Power engine/generator set as part of the rebuild. The GP40-2Hs have flared radiators, reminiscent of EMD’s larger SD45 freight units.

For a decade, the GP40-2s served as the primary power for the Department of Transportation’s Shore Line East commuter service, over 50 miles of Amtrak’s Northeast Corridor between New London and New Haven, Conn., and on 40 miles of Metro-North’s New Haven Line between New Haven and Stamford. In 2006, CDOT augmented the Shore Line fleet with eight former Amtrak P40 Genesis units.

The GP40-2H units currently work in the red, white, and black New Haven Railroad “McGinnis” paint scheme — originally introduced on that “Fallen Flag” railroad in 1955. There has been no announcement of how they will be painted during their rebuild at NRE.