Grupo Mexico, the mining and transportation conglomerate that once was considered a front-runner to buy Banamex from Citi, has made the bank a fresh offer, according to a securities filing Friday seen by Reuters and Bloomberg.
The conglomerate, controlled by Mexican billionaire Germán Larrea, would buy 25% of Banamex at 85% of its book value, and the remaining 75% at 80% of book value, the wire services reported.
The former portion appears to be an attempt to outbid fellow Mexican billionaire Fernando Chico Pardo, who last month offered to buy 25% of Banamex at 80% of book value, or roughly $2.3 billion.
Grupo Mexico said that while it intended to purchase all of Banamex, it would allow Chico Pardo to keep his 25% stake if he wanted, and the mining conglomerate would shrink its bid to 75% of Banamex at 80% of book value.
Citi, meanwhile, said Friday it had not yet formally received the Grupo Mexico bid.
“If an offer is presented by Grupo Mexico, we will of course review it in a responsible manner and consider, among other risk factors, the ability to obtain required regulatory approvals and the certainty of closing a proposed transaction,” the bank said in a statement.
The Chico Pardo bid – combined with an initial public offering – “continues to be our preferred path,” Citi said.
“We remain committed to realizing the full value of Banamex for our shareholders,” the bank said.
Wells Fargo analyst Mike Mayo last month said the Chico Pardo bid “gives clarity on how much a full divestiture [of Banamex by Citi] could raise: If the rest of Banamex were to go for the same price as the initial 25%, Citi would fetch $9.1 billion for its Mexico retail presence. That’s more than 25% less than the $12.5 billion Citi paid for Banamex in 2001.
In its filing Friday, Grupo Mexico said safeguarding Banamex's workforce would be among its priorities.
Chico Pardo last month made much the same pledge.
“We firmly believe that Banamex and its talented and experienced team will continue to be a fundamental pillar supporting Mexico, its companies and its families,” Chico Pardo said.
Grupo Mexico said one aim of the Banamex bid is to “significantly boost[] access to credit for families and businesses in our country.”
Grupo Mexico in 2023 secured a $5 billion debt package tied to its proposed acquisition of Banamex. That deal would have valued Citi’s Mexico retail footprint at between $7 billion and $8 billion.
But Mexico’s then-president, Andrés Manuel López Obrador, continually publicized his preferences for the deal, saying he would require job protections for workers and forbid Banamex’s art collection from leaving the country.
However, when López Obrador seized control of a railroad line Grupo Mexico operated, tensions with Larrea flared, and Grupo Mexico dropped its bid.
López Obrador had said the Mexican government was analyzing a potential bid for Banamex in Grupo Mexico’s stead.
Citi then walked away, with the aim of launching an IPO in 2025.
The bank separated its institutional business from Banamex last December, and Citi CEO Jane Fraser reportedly met with López Obrador’s successor, Claudia Sheinbaum, in August. Sheinbaum didn’t want to see any foreign buyers, or further consolidation in Mexico’s banking sector, according to Bloomberg.
In its filing, Grupo Mexico said the bid shows "unwavering confidence" in its home country, adding that the acquisition would make Banamex competitive again.
The move also unquestionably complicates Citi’s intended retreat from the market – one of 14 countries it earmarked for withdrawal (at least on the retail side) in 2021 and 2022.
