Citi’s Mexican retail business also attracted foreign players operating in Mexico, including Banco Santander, while other potential buyers, including Mexican billionaire Carlos Slim, have withdrawn from the competition, after a year-long process
Banamex ATM in Puerto Vallarta, Jalisco, Mexico. (Credit: Coolcaesar/English-language Wikipedia)
Mexican conglomerate Grupo Mexico is set to purchase Banamex, Citigroup’s retail banking business in the country, for a total consideration of about $7bn, according to Reuters report.
Citi is expected to retain around 10% stake in the Banamex, which the company may sell to Grupo Mexico, or list the stake on public markets.
Several other potential buyers, including Mexican billionaire Carlos Slim, have withdrawn from the competition to acquire Banamex, after a year-long process.
Citi’s Mexican retail business also attracted interest of foreign competitors operating in Mexico, including Banco Santander, said the publication.
Last year, Citi initially announced its plans to divest its Mexican retail unit, as part of its CEO’s efforts to sell certain international operations.
The company has separated its retail and wholesale businesses as Banamex and Citi Mexico.
Mexican corporate executives Carlos Slim and German Larrea were the top bidders for the business units.
In February this year, Reuters reported that Grupo Mexico has secured a $5bn debt package to fund its proposed acquisition of Banamex, which could value between $7bn and $8bn.
Several banks, including Barclays and HSBC Holdings, are committed to provide the debt financing to Grupo Mexico, for the transaction, said the publication.
The company has sold its retail businesses in various countries across Asia and other territories worldwide, over the past one year.
Last year, Citigroup planned to acquire Deutsche Bank’s licence in Mexico, to support its corporate and investment banking operations in the country.
The announcement follows the Citi’s decision to sell the consumer, small business, and middle-market banking operations of its Mexican subsidiary Banamex.
Citi has been present in Mexico for more than a century and will continue its institutional banking operations, along with its Private Banking franchise.