STB Approves GMXT’s Acquisition of CG Railway

The Surface Transportation Board (STB), a federal agency overseeing economic regulation in the United States surface transportation, granted approval for Grupo México Transportes (GMXT) to acquire CG Railway (CGR), a Class III rail carrier. The board’s decision allows GMXT to purchase SEACOR’s stake in CG Railway, marking a significant step in the cross-border rail sector. 

The STB’s approval, granted on Aug. 13, provides GMXT with an exemption from prior approval requirements, citing that the acquisition is unlikely to negatively impact competition or harm shippers. Instead, the board anticipates that the transaction will enhance service efficiency and encourage further investment in the rail transportation system.

Earlier this year, Genesee & Wyoming (G&W) welcomed GMXT as a new partner in its CG Railway joint venture, pending regulatory approvals for their equity purchase in CGR. GMXT sought this exemption to gain a 60% controlling interest in CG Railway, which operates rail services at the Port of Mobile, Alabama, and rail ferry services between Mobile and the Port of Coatzacoalcos, Veracruz.

The ownership structure of CG Railway includes Golfo de Mexico Rail Ferry Holdings, a joint venture equally owned by Seacor Holdings and Genesee & Wyoming. On Dec. 22, 2023, GMXT completed the acquisition of a 60% stake in Golfo de Mexico Rail Ferry Holdings and Rail Ferry Vessel Holdings, as previously reported by MBN. This acquisition also involved GMXT’s majority ownership in Terminales Transgolfo, which manages the rail ferry terminal in Coatzacoalcos.

Under the terms of the recent acquisition, GMXT will acquire Seacor’s 50% stake and an additional 20% of GWI’s 50% stake in the joint venture, resulting in a 60% indirect ownership interest in CGR. This consolidation is expected to optimize operations and drive investment in CGR’s rail ferry services, enhancing overall service efficiency. GMXT maintains that the acquisition will not diminish market competition, given the competitive nature of the Mexico-US transportation market and CGR’s relatively minor role within it.

The STB’s decision also includes standard employee protective conditions to safeguard workers’ interests. The decision will take effect on Sept. 12, 2024, allowing interested parties time to review and potentially respond.