Grupo México in advanced talks to acquire Banamex: Bloomberg

Grupo México — a conglomerate owned by Mexico’s second richest person — is in advanced talks about a potential purchase of Citibanamex, Bloomberg News reported Monday.

Citing people with knowledge of the matter, Bloomberg said that mining magnate Germán Larrea is attempting to finalize a deal to buy Citigroup’s Mexican retail bank, commonly known as Banamex.

The unnamed sources said that no final agreements have been reached and noted that the talks could fall apart. They also said another buyer could emerge.

The only other known potential buyer is Banca Mifel, a Mexican bank. Bloomberg reported last week that a group of investors led by Mifel and backed by private equity firm Apollo Global Management were in talks with banks for about US $2 billion of financing for their bid to buy Banamex.

The Bloomberg sources said that Citgroup could also offload Banamex via an IPO, or initial public offering.

Citigroup, a U.S.-owned corporation, announced in January it would sell Banamex, and attracted interest from Carlos Slim’s Inbursa bank, Spain’s Santander and Mexico’s Banorte.

However, the number of bidders hasdwindled amid a set of conditions laid out by President Andrés Manuel López Obrador, including that the new owners refrain from carrying out mass firings,” Bloomberg said. 

According to Scotiabank analyst Alfonso Salazar, Banamex is not a good fit for Grupo México, which is primarily focused on mining but also has railroad and other infrastructure interests. 

He said in a note that the conglomerate’s purchase of the bank could indicate that more disparate acquisitions will follow. The analyst said that the purchase, if it goes ahead, could have a negative impact on Grupo México’s share price as entering the banking sector increases regulatory risk for its mining and rail concessions. 

With reports from Bloomberg 

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