After the president of Mexico declared yesterday that if Grupo México gave up continuing in the negotiations to sell Banamex, the federal government would seek the option of buying the institution through a possible Public Private Association (PPP).
This morning Citigroup announced that it will carry out an Initial Public Offering (IPO) of its Consumer Banking and Corporate Banking businesses in Mexico, with which it will continue in the already planned separation of its institutional businesswhich will remain as part of Citi.
Previously, Citigroup had announced a dual process for its exit from the consumer banking business in Mexico, which included a possible Initial Public Offering (IPO), with the commitment to offer maximum value to its shareholders.
What does this decision mean for Banamex?
Citigroup will maintain the Banco Nacional de México (Banamex) brand and will continue to be one of the leading financial groups in Mexicoexplained the corporate this morning in a statement.
Thus, Banamex will continue to offer its range of financial services for the Consumer Banking and Business Banking segments, with a wide distribution network of 1,300 branches, 9,000 ATMs, 12.7 million Consumer Banking customers, 6 1,600 Business Banking clients and 10 million clients in its Afore.
Citigroup’s global director, Jane Fraser, said that after careful analysis, it was concluded that the optimal path to maximize Banamex’s shareholder value and advance its strategic objective of simplifying the firm is to move on the dual path, to focus only on an IPO of the Business.
“Citi has operated for more than a century in Mexico and we will continue to invest and grow our industry-leading institutional franchise in this very important country to us, thus bringing the full potential of Citi’s global network to our institutional clients and of Citi Private Bank in this priority market”, said the directive.
Neither to Larrea nor to the government
The measure is taken after intense hours full of speculation and comments in the sense that Germán Larrea, owner and president of Grupo México, would withdraw from negotiations to acquire the institution for an amount of up to 7,500 million dollarsafter the railway facilities of its subsidiary Ferrosur were occupied by the government on Friday.
In addition, in the face of said speculation on Tuesday morning, the president of Mexico, Andrés Manuel López Obrador, pointed out that if Larrea did not buy Banamex, the federal government could acquire the institution.
With Citigroup’s announcement, given the Mexican government’s refusal to grant authorization to a potential global buyer who is not of Mexican origin, given the scarcity of Mexican buyers and the series of conflicts currently involving who could buy the bank, Citigroup hits the table, says no to everyone and will go to the only option left to it, the IPO.
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