Citigroup is nearing the sale of its Mexican retail bank in a deal that could value it at up to $8bn despite government interference scaring off potential bidders and driving down the price of the unit. Billionaire Germán Larrea, who owns Mexico’s largest mining company Grupo México, is in exclusive talks to purchase Banamex, according to three people familiar with the matter.
Larrea’s offer is likely to value Banamex at between $6bn and $8bn, depending on how the deal is structured, the people said, below the $10bn or more predicted by some of the more bullish analysts. In January 2022, Bank of America analysts suggested that the “franchise could be worth US$12.5bn-$15.5bn”.
The same people warned that negotiations, while advanced, were ongoing and there was no guarantee a deal would be agreed. Another bid by Mexican bank Banca Mifel with backing from private equity fund Apollo also reached the later stages of negotiations but Citi chose to continue with Larrea, they added. Two of the people with direct knowledge said Grupo México and Citi were discussing the US bank holding on to a stake in Banamex until it could later sell it on in an initial public offering. Bloomberg first reported the possibility.
“We are in an active dialogue and continue to pursue a dual process that includes both the sale of the consumer business, as well as potential for an IPO. We are pleased with our progress and remain committed to pursuing a path that maximizes value for our shareholders.”
Source: Financial Times