JACKSONVILLE, Fla. – Mexican mining and rail conglomerate Grupo Mexico says it has reached an agreement to buy Jacksonville-based Florida East Coast Railway Holdings Corporation for $2.1 billion, all-cash transaction.
Grupo Mexico Transportes said Tuesday it will acquire 100 percent of the company's shares and assume its debt, pending approval of the deal by regulatory authorities from both the United States and Mexico.
FEC serves the entire East Coast of the state. It is the exclusive provider of rail service to South Florida's ports -- Port Miami, Port Everglades and the Port of Palm Beach.
FEC provides service across 351 miles of owned track, and with connections to CSX and Norfolk Southern in Jacksonville, FEC is able to serve 70 percent of the United States population in one to four days. According to a 2015 University of North Florida case study, the railroad employs about 600 people.
FEC's history can be traced back to Henry Flagler, an oil man who, along with partner of John D. Rockefeller, founded Standard Oil, once considered the biggest and wealthiest industrial company in the world.
Flagler is synonymous with the early growth of commerce and tourism of Florida, especially St. Augustine. After building the Ponce de Leon Hotel in St. Augustine, Flagler moved on to creating a railroad to south Florida that would become the Florida East Coast line.
By 1913, when Flagler died, FEC connected the entire East Coast of Florida, from Jacksonville to Key West.
FEC's HISTORY: Flagler's 1988 St. John's Railway grew into FEC Railway
The acquisition of FEC will immediately establish GMXT as an important railroad owner in the United States, adding the Florida rail line to the company's existing operations in Texas.
"The FEC team looks forward to working with GMXT to grow our business, execute our key strategic initiatives and take advantage of new opportunities," said Jim Hertwig, president and CEO of FEC.
The transaction will be financed by $350 million in Grupo Mexico funds and $1.75 billion in debt.