Citigroup to publicly list Banamex, and AMLO wants a piece of it

Nearly a year and a half after Citigroup said it was considering either a sale or an IPO for its Mexico retail unit, Banamex, the U.S.-based financial services company has decided to pursue the latter. Citi announced on Wednesday that it intends to launch an initial public offering of Banamex by 2025 as it expects to separate the retail division from the rest of its operations in the country by mid-2024. 

The group did not say on which stock exchange it plans to launch the Banamex offer. However, according to sources from Reuters, the bank is considering a dual stock listing, possibly in Mexico City and New York.

Citi also said it would continue to operate its banking business under the license it has in Mexico through its two other verticals, the Institutional Clients Group, which provides banking and advisory services to private and public institutions, clients from the financial sector, and investors, and the Private Banking operations focused on very high-net-worth individuals and families. Citi will need the Central Bank’s authorization to make all these changes.

Grupo México, the conglomerate controlled by Mexican billionaire German Larrea, was the buyer that came closest to a deal to acquire Banamex. In recent weeks, local media outlets reported that the deal was close to completion. Growing tensions between the conglomerate and President Andrés Manuel López Obrador, however, contributed to changing the course of the negotiations. Last Friday, AMLO, as the Mexican president is known, tried to expropriate part of a railroad belonging to Grupo México.

Since Citi’s first announcement, AMLO insisted that Banamex must be in Mexican hands and that any sale could not lead to layoffs. After Citi’s announcement this Wednesday, the president said during a press conference that the government could buy a part of Banamex, stressing it would have up to USD 3 million to do so — which would maybe be enough to acquire a quarter of the bank.  

In addition to Grupo México, several other banks and companies have shown interest in buying Banamex, including Banca Mifel, Banco Azteca, Banco Santander, Banorte, and Inbursa, as well as HSBC and Ve por Más. 

Previous calculations by some financial institutions, such as Bank of America and BBVA, valued Banamex’s businesses for sale at between USD 12.5 and USD 15 billion. Citi first bought Banamex in 2001 for USD 12.5 billion — at the time, it was the largest Latin American deal involving a U.S.-based acquirer.

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