Grupo Mexico Offers to Fully Acquire Banamex From Citi

Mexican conglomerate Grupo Mexico has submitted a binding offer to acquire up to 100% of Banamex from Citigroup, reviving negotiations that had been scrapped in 2023 and proposing alternatives that include partnering with the recent buyer of 25% of the bank.

The move comes after Citigroup announced last month that a company wholly-owned by Fernando Chico Pardo and members of his immediate family has agreed to purchase from Citi an equity stake in Grupo Financiero Banamex for $2.3 billion.

Owned by magnate Germán Larrea, Grupo Mexico is a multinational conglomerate in the mining, transportation and infrastructure industries. It owns Mexico’s largest mining company and is the country’s leading copper producer. The group also operates the largest national railway network and major infrastructure projects.

The company notified the Mexican Stock Exchange (BMV) on Monday of its proposal to purchase 100% of Grupo Financiero Banamex, saying that it will maintain the bank’s majority Mexican ownership and strengthen its competitiveness in the country.

“Once Banamex is regulated solely by Mexican financial authorities, it will be able to regain its competitive potential in our financial system,” Grupo México said in the letter addressing the Mexican bourse.

Fernando Chico Pardo, President of Grupo Aeroportuario del Sureste (Asur), announced the purchase of 25% of the bank’s shares and Grupo Mexico left open the possibility of acquiring only 75% of the bank, in order to respect Chico Pardo’s offered investment.

Offer Not Received

Meanwhile, Citigroup said that it has not yet received an offer by Grupo Mexico, and its only current deal is with Chico. However, the US Bank said that if Grupo Mexico submits an offer, Citi will consider it.

Citi said that the agreement announced last week with Fernando Chico Pardo and its proposed IPO remain the bank’s preferred path.

“If Grupo Mexico makes an offer, we will, of course, review it responsibly and consider, among other risk factors, the ability to obtain the required regulatory approvals and the certainty of closing a proposed transaction,” Citigroup said.

The divestiture of Banamex remains a strategic priority and as previously noted, any decisions related to the timing and structure of the proposed Banamex initial public offering (“IPO”) will continue to be guided by several factors, including market conditions and receipt of regulatory approvals.

This is the second time Grupo Mexico has raised the issue of acquiring Banamex. It first expressed interest in 2023 but the deal fell through. The news of a potential 75%-100% stake in Banamex caused Grupo Mexico’s stock price to sink 18.8% on Monday morning.

Germán Larrea is the second-richest man in Mexico with an estimated fortune of $46.3 billion, according to Forbes magazine. Carlos Slim is first.

Banamex is the fourth-largest financial group in Mexico by total assets and offers a full suite of financial services to consumers and small and mid-market business owners through an extensive distribution network of 1,300 branches, 9,000 ATMs, 13.6 million retail banking clients, 6,000 commercial banking clients and 8.6 million pension fund management customers.