Punta Maldonado beach where effects of the Tonga volcano were seen.
The effects of a volcanic eruption on an island in the South Pacific Ocean have been seen about 9,000 kilometers northeast in Guerrero.
A very large eruption last Friday on Hunga Tonga, an uninhabited volcanic island of the Tongan archipelago, caused tsunamis on neighboring islands, including Tonga where at least three people died and many more went missing.
The effects of the eruption were felt across the Pacific and reached Guerrero where sea levels on the 500 kilometer coastline were reported to have risen 30-50 centimeters on Saturday.
Guerrero Civil Protection director Roberto Arroyo Matus confirmed that there was no serious damage in the state but added that in Cuajinicuilapa, a town in the Costa Chica region near the Oaxaca border, some beach huts were taken out by powerful waves.
The mayor of Cuajinicuilapa, Edgar Paz Rojas, explained that the large waves destroyed about 30 beach huts in the nearby town of Punta Maldonado.
Small rises in sea levels were also observed on the coasts of Baja California and Colima.
The effects of the eruption were felt in New Zealand, Japan, the United States, the Russian Far East, Chile and Peru, where two people drowned after a two-meter wave struck the coast.
The newspaper said Zihuatanejo is a perfect destination for the environmentally conscious. stacyarturogi/Shutterstock
A beach destination in Guerrero made the top five on a New York Times list of places to visit in 2022.
Zihuatanejo, 200 kilometers northwest of Acapulco, occupied fifth place on the newspaper’s list of 52 global destinations where visiting could be especially positive for the local economy and environment, or as the Times put it, “where travelers can be part of the solution.”
The first four destinations are Chioggia, Italy; Chimanimami, Mozambique; the Queens borough of New York City; and Northumberland, England.
The newspaper said Zihuatanejo is a perfect destination for the environmentally conscious. “This laid-back beach town … and communities around it have spawned grassroots environmental projects that travelers can support.”
It highlighted the conservation charities Whales of Guerrero, which trains fishermen as whale-watching guides, and Campamento Tortuguero Ayotlcalli, where visitors can join turtle nest patrols and release hatchlings. It also mentioned vegan projects by the musical duo Rodrigo y Gabriela, including the restaurant La Raíz de la Tierra and the “solar-powered regenerative resort” Playa Viva, located 46 kilometers southeast of Zihuatanejo.
The Times spotlighted Zihuatanejo’s Campamento Tortuguero Ayotlcalli, which rescues sea turtles and educates the public about conservation. Campamento Tortuguero Ayotlcalli
Mayor Jorge Sánchez Allec said Zihuatanejo was in fashion and well prepared as a tourist destination. He added that it became one of Mexico’s principal destinations during the 2021–2022 tourist season, with visitors from Canada, the United States, Europe and Asia.
Infrastructural improvements were made to the town while tourism was restricted for nearly two years due to the COVID-19 pandemic: the community renovated its 50-year-old pier at a cost of almost 90 million pesos (US $4.4 million), and a 20-kilometer cycling path was built to connect Zihuatanejo to the resort town of Ixtapa. Also, a 1-kilometer beach pathway with access to housing was laid for 20 million pesos (almost US $1 million).
Sánchez said major improvements to highways were under consideration to improve connectivity.
There are direct flights from Zihuatanejo to six cities in Canada and seven in the United States, as well as seven daily flights to Mexico City.
A chain of cannabis stores part owned by former president Vicente Fox is pursuing an aggressive expansion strategy: it intends to open 130 additional outlets by the end of the year.
Paradise, which sells products such as CBD (cannabidiol) oil, hemp oil, bongs, pipes, marijuana grinders and papers, currently has about 70 stores in 28 states, according to operations chief César Escalante.
He told the newspaper El Universal that the chain’s goal is to have 200 stores across all 32 states by the end of the year. One location where a new store is set to open soon is San Luis Potosí city.
Among the cities where Paradise already has stores are Monterrey – where the company was founded, Mexico City, Ciudad Juárez, Saltillo, Mazatlán, Culiacán, Aguascalientes, Pachuca, Tijuana, Guadalajara, Playa del Carmen and Querétaro.
Fox, president from 2000 to 2006 and an outspoken supporter of marijuana legalization, is not the only high-profile investor in Paradise. Actor Roberto Palazuelos, a telenovela (soap opera) star, is also a partner in the company founded by Fernando Carcamo, Fernando Espinobarros and Guillermo Palau.
In a video on the Paradise website, Fox extends an invitation to “bold and dynamic entrepreneurs” to consider opening a Paradise franchise.
“Paradise’s idea is to share the business with many of you throughout the Mexican republic, providing and granting franchises – franchises that you can have, that you can operate and in which you will have high returns for your investment,” said the former National Action Party president, who also sits on the board of a Canadian medical marijuana company that operates in Colombia.
The chain appears to be well-placed to sell marijuana buds once the recreational use of the drug is legalized, something which is expected to occur later this year.
However, Paradise’s main focus is currently on the growing market for CBD products. Escalante said the chain’s aim is for all Mexicans to be aware of their benefits.
According to a 2019 New York Times explainer, “CBD is advertised as providing relief for anxiety, depression and post-traumatic stress disorder” and is also marketed to promote sleep.
The newspaper described CBD as “the lesser-known child of the cannabis sativaplant,” adding that “its more famous sibling, tetrahydrocannabinol, or THC, is the active ingredient in pot that catapults users’ ‘high.’”
Part of CBD’s popularity, the Times said, is that it “purports to be ‘nonpsychoactive,’ and that consumers can reap health benefits from the plant without the high (or the midnight pizza munchies).”
Photojournalist Margarito Martínez had recently been put under protection after receiving threats. Twitter
Two journalists have been killed in the space of a week in Veracruz and Baja California.
José Luis Gamboa died in hospital in Veracruz city on January 10 but wasn’t identified until January 14, the Committee to Protect Journalists (CPJ) reported. The journalist protection agency Reporters Without Borders (RSF) said he was stabbed to death in what may have been a robbery.
Gamboa was the director of the local news website InfoRegio in which he wrote about connections between organized crime and politicians. He wrote recently that “Mexico’s tragedy is the narco-trafficking to which municipalities are subject; instead of fighting it the entire governmental power structure is linked up with a considerable criminal association.”
Veracruz Attorney General Verónica Hernández said the murder was being investigated in relation to his work as a journalist.
Photojournalist Margarito Martínez was killed in front of his house in Tijuana, Baja California, on Monday. He had recently been put under protection after receiving threats from a former police officer, the newspaper El Universal reported.
Martínez worked for the Los Angeles Times and the BBC and a string of local publications.
José Luis Gamboa died in hospital in Veracruz city on January 10 but wasn’t identified until January 14. internet
The director of the local newspaper Zeta Tijuana, Adela Navarro, a former colleague, said the murder was tragic but unsurprising. “A terrible, painful, unjust event. It provokes anger, frustration and reflects the situation in Tijuana, where weapons abound,” she said.
Reporters Without Borders said the journalists’ lines of work had exposed them to danger. It called for thorough investigations.
“Both journalists were covering the corruption and organized crime that are rampant in their region. RSF calls for an exemplary investigation, at both local and federal level, to identify those responsible for these crimes,” the organization said.
Mexico is the most dangerous country in the world to practice journalism, according to RSF. Meanwhile, the Committee to Protect Journalists reported that nine journalists had been killed since December 2021; 48 journalists have been killed in Mexico since December 2018.
Resolution for the murder of any journalist or activist in Mexico remains unlikely: impunity reigns in more than 90% of their murder cases, Deputy Human Rights Minister Alejandro Encinas said in December. In cases where the culprits were identified, almost half were local officials, he said.
Tire spikes are engaged at the Américas toll plaza in Ecatepec.
The evasion of tolls at a notoriously lawless toll plaza in México state looks set to become a thing of the past thanks to the installation of an automated traffic spike system.
After conducting a pilot program at the Las Américas toll plaza in Ecatepec, the operator of the Circuito Exterior Mexiquense (México state Outer Loop Road) determined that the only way to stop would-be scofflaws from passing through without paying the 62-peso (US $3) toll was to threaten to puncture their vehicles’ tires.
The automated dissuasion system – which consists of a retractable barrier of metal spikes – will be used on a permanent basis starting Tuesday. Signs on the loop road will warn motorists that the system is in operation.
If a motorist fails to pay the toll, an alarm is automatically activated and the traffic spike system is deployed. Once a vehicle’s tires have been punctured, authorities will remove it from the road and the driver will presumably face a sanction such as a fine.
“What we’re seeking to do is dissuade … drivers from committing an illegal act,” said Javier Castro, operations director of the Circuito Exterior Mexiquense. “In recent years and recent months the number of [highway] users evading the toll has increased.”
En el Circuito Exterior Mexiquense se pondrá un sistema de disuasión de evasión de peaje (Ponchallantas) en la caseta de cobro T-2 Las Américas, ubicada en el kilómetro 38 + 906, en Ecatepec. pic.twitter.com/Tn3OkQ3ZfK
Marco Frías, director of the Mexican Association of Highway Infrastructure Concessionaires, said last week that the non-payment of tolls is most prevalent on the eastern side of the Valley of México metropolitan area, which includes Mexico City and surrounding México state municipalities such as Ecatepec.
There are videos on websites such as Facebook and YouTube that teach motorists tricks to avoid paying tolls, while toll plaza takeovers by protesters, unemployed people and others also result in non-payment and a consequent reduction in concessionaires’ revenue.
Prison authorities say the baby was not born inside the prison.
The notorious Center for Social Reinsertion (Cereso) in the San Miguel neighborhood of Puebla is once again in the news after the body of a young infant was found in the prison’s dumpsters.
A prisoner was looking for plastic bottles in the trash when he found the small baby with a surgical incision in its abdomen. The inmate quickly reported his grisly discovery to guards.
Authorities are uncertain how the baby entered the prison but said that it was not born behind bars. Visits by children are currently prohibited due to the pandemic, and there was no register of the baby’s ingress.
The cramped prison has the capacity for 2,100 inmates, but the prison population exceeds 3,000. It has been the target of humans rights investigations in the past and has a dark history of riots, gang control and corrupt officials.
The incident began to receive more media attention after the nonprofit Reinserta, which works with children who have been exposed to violence in Mexico, released a statement condemning the child’s murder.
The prison is notoriously “self-governed” by its own prisoners, the organization’s founder, Saskia Niño de Rivera, alleged. She said that extortion, corruption, visits from outside prostitutes and the manufacture of illegal drugs are all commonplace. She condemned the prison authorities for not implementing established visitor protocols and ensuring that visiting children have a safe, controlled environment.
The signs of recent surgery suggest that the baby was used to bring drugs into the prison facility, Niño de Rivera said. But ultimately, she blamed authorities for what happened, especially Puebla Governor Miguel Barbosa Huerta “for his absolute incapacity to maintain control of a prison in which the murder of this baby went unnoticed.”
In response to the revelation, the governor promised that the state Attorney General’s Office would conduct an in-depth investigation.
“This investigation will be handled with the secrecy necessary to uncover the truth, first determining where the child was born … because he was not born in the prison,” Barbosa said.
He assured the public he was taking the case seriously and said the investigation would dredge up “a lot of filth.”
Rosalba Eloisa López González holds out the hat, hoping for some tips from passersby in Mexico City's zócalo. photos by Joseph Sorrentino
Walking down the streets around Mexico City’s historic district amid all the bustle and noise, there always seems to be one sound I can hear above all the rest: the piercing music from an organillo (barrel organ). Love them (as many people do) or hate them (as many more do), they’ve been a fixture on the city’s streets for well over 100 years and will undoubtedly be around for many more.
I’ll admit that I’ve not been a fan of this musical tradition. I avoided organilleros (organ grinders) when I could and never gave them a peso when I couldn’t. I often complained to my girlfriend about the noise they made.
But one day in Mexico City, a day when organilleros seemed to be everywhere, I decided I needed to learn more about them.
Organillos were first brought to Mexico from Germany sometime in the early 1880s. The instrument consists of a box with cylinders covered by tiny metal spikes. To make music, an organillero turns a handle that’s connected to the cylinders.
As the cylinder turns, the spikes hit metal levers, each one corresponding to a specific pitch. The levers connect to rods controlling valves that let air into the instrument’s pipes, producing sound.
Luís Manuel Valdovinos wears the iconic beige Mexico City organ grinder uniform.
These days, most barrel organs in Mexico come from Guatemala or Chile.
There are around 450 organilleros in Mexico City, all dressed in a traditional uniform of a beige shirt and pants and a beige hat with a black bill. Many work in pairs, with one organillero playing the instrument while another holds out a hat, hoping to collect a few pesos.
On this day, Luís Manuel Valdovinos stood in the middle of Francisco I. Madero avenue, holding out his hat as people passed by. He comes from a family of organilleros.
His father and uncles were both in the profession. “I started working when I was 15 and have been an organillero for 33 years,” he said.
Valdovinos works with his wife Rosalba Eloisa López González and a friend, José Adán García. They’re out there six days a week, working from 9 a.m. to 6 p.m.
“I work first for necessity, second for tradition,” Valdovinos continued.
López was nearby, playing the instrument as Valdovinos collected what money he could. “It is something cultural. People like the songs,” she said. “The songs are puro Mexicano.”
Each organillo typically has eight tunes stored in the box, and organilleros change them whenever they feel like it. Although some have started playing more modern songs, the majority still play Mexican classics like “Las Mañanitas” or “Cielito Lindo.” To be honest, I’m usually not able to tell one song from another.
Organilleros generally change locations, moving from street to street every couple of hours, lugging an instrument that weighs 30 kilograms.
Although it may seem like there’s no skill involved playing an organillo, it does take some training — along with a good ear and strong arm. Songs have different tempos, and an organillero has to adjust how fast he or she turns the handle, which also must be turned consistently.
“At the end of the day, my arm is tired,” said Carlos Hernández, who’s been doing this for 15 years.
He stood patiently as a young woman tried her hand at playing the barrel organ. After a couple of cranks of the handle, she thanked him and walked away. “Many people like to try it,” he explained.
Organilleros depend on people’s generosity to earn money. “There really is no average,” said Odilón Cárdenas, who had staked out a spot in front of the Metropolitan Cathedral in the zócalo. “Some give a peso, some 10 pesos. People tend to be more generous during the Christmas season.”
A woman passing by is allowed to try out the attention-getting barrel organ.
Rocio Acoña and her friend Edna Romero were two of the very few people who stopped to give money. “I like it because it is a tradition,” said Acoña. “I give money to all of them.”
Romero felt the money was “symbolic” (her word). “It is not much, but it helps them survive,” she said.
The majority of organilleros are barely surviving.
“I earn about 300 pesos (US $15) a day,” said José Carmen Flores Pichardo, a 74-year-old gentleman who’s been working for 12 years.
“I work six days a week, 12 hours a day and rest on Sundays,” he said.
Although one organillero said he earned 500 pesos (USD $25) a day, three others said they usually earned about what Flores did. And they all have to pay a rental fee of 200 pesos (US $10) a day for the instrument.
The pandemic has affected these musicians perhaps more than many other workers. There are fewer tourists in the city and, with more people out of work, they’re giving less. “With the pandemic, it is hard to earn enough,” admitted Hernández.
I spent a couple of hours wandering the streets near Mexico City’s zócalo, talking to organilleros, watching them work, seeing hundreds of people pass them by as if they were invisible while they stood on the sidewalk or in the street for hours.
They held out their hats, moving from one side of the street to another with a kind of grace, never saying much more than “gracias” whether people gave them a few pesos or nothing at all.
They never accosted people and never seemed to get discouraged although they only earned a couple of hundred pesos for a 10- or 12-hour day. All the ones I spoke with said they’d continue working as organilleros.
A few had their children working with them, hoping that they would continue the tradition.
I no longer avoid organilleros and give a few pesos to each one I pass. Because before I only heard noise; now I hear music. Sweet music.
A visualization of the Palais development in Tulum.
An apartment on the Riviera Maya in Quintana Roo has been sold using Bitcoin, making it the first ever property sale of its kind in Mexico.
A woman from Peru spent 5.78 Bitcoin, equivalent to US $248,000, to put her name on the property.
The apartment is in the Palais complex in Tulum, which is 80% built. The luxurious two bedroom apartments are marketed as condos: the most expensive is valued at $332,770, which is a 150-square-meter rooftop apartment.
The real estate agent in the deal, La Haus, announced in November 2021 that it would accept Bitcoin for properties in Colombia and Mexico to attract international buyers.
Jehudi Castro from La Haus’ Innovation and Future department said the new payment method relieved obstacles. “One of the aspects that most enticed us when it came to incorporating this payment method, in addition to the ease it represents, was the possibility of breaking geographical barriers,” he said.
Jonathan Cuan, the founder of Palais’ property developer, Rivieralty, said cryptocurrency could help attract more international buyers to Mexico. “We were really interested in opening our developments to cryptocurrencies … since 50% of our clients are foreigners. That way we can simplify the process of investing in Mexico. La Haus’ integrated solution solved all the technical and legal issues for us,” he said.
The first Bitcoin real estate transaction in Mexico was for commercial premises sold by La Haus in Tulum.
La Haus was founded in 2017 by Jerónimo and Tomás Uribe, sons of former Colombian president Álvaro Uribe. They expect to soon broker Bitcoin sales for properties in Colombia.
Luis Echeverría, a controversial and widely-despised president who ruled Mexico during the country’s “dirty war,” turns 100 on Monday, becoming the first Mexican president to reach triple figures.
President for the Institutional Revolutionary Party (PRI) from 1970 to 1976 and interior minister for seven years before that, Echeverría was born in Mexico City on January 17, 1922.
The bespectacled former leader, who now lives in Cuernavaca, planned to mark Monday’s milestone with a celebration on video conferencing platform Zoom with approximately 30 friends, family members and former collaborators, the newspaper Reforma reported.
Echeverría, born less than two years after the end of the Mexican Revolution, studied law at university and started working for the PRI – Mexico’s once omnipotent party – in 1946. He was a deputy interior minister by the late 1950s and became interior minister at the tail end of Adolfo López Mateos’ 1958-64 presidency.
Echeverría stayed on as interior minister when Gustavo Díaz Ordaz assumed the presidency in late 1964 and remained in the position until November 1969.
His position in the Díaz government – interior minister is generally considered Mexico’s second highest office – implicated him in the 1968 massacre of students in the Mexico City neighborhood of Tlatelolco, perpetrated by the armed forces just 10 days before the start of the Summer Olympics in the Mexican capital.
The massacre, in which an estimated 350 to 400 students were killed, is considered part of the Mexican Dirty War, an internal conflict from the 1960s to the 1980s in which successive PRI governments violently repressed left-wing student and guerrilla groups.
State-sponsored violence continued with Echeverría at the helm of the federal government, most notably with the 1971 Corpus Christi massacre in Mexico City, briefly depicted in the award-winning 2018 film Roma.
An estimated 100 to 200 students, some in their early teens, were killed in the massacre known as El Halconazo, or the Hawk Strike, because it was perpetrated by a government-trained paramilitary group called Los Halcones.
Echeverría attempted to distance himself from the violence and enforced disappearances that marked both Díaz’s government and his own administration, but he was unable to escape the attention of a special prosecutor’s office established during the 2000-2006 Vicente Fox presidency to investigate violence perpetrated by the state in the 1960s, ’70s and ’80s.
The ex-president was summoned to give evidence in 2002, formally accused of genocide and a warrant for his arrest was issued.
The centenarian was absolved of genocide charges in 2009.
But Echeverría obtained an injunction against the arrest order and was never taken into custody. He did, however, spend a period under house arrest before being exonerated of genocide charges related to the Tlatelolco massacre in 2009.
Despite his advanced age, activists are still seeking to hold the ex-president to account for his alleged crimes against humanity.
The centenarian, who served as ambassador to Australia in the late 1970s, was last seen in public last year when he was taken in a wheelchair to the Olympic Stadium in Mexico City to get a COVID-19 vaccine shot.
As president, he ruled Mexico with a style of populism similar to that employed by Lázaro Cárdenas, Alexander Aviña, a historian, told the newspaper El País.
Cárdenas, president from 1934 to 1940, is best remembered for nationalizing Mexico’s oil industry and, unlike Echeverría, a beloved Mexican president.
During the campaign leading up to the 1970 presidential election, Echeverría “traveled the whole country to meet different communities wearing his guayabera [shirt],” said Aviña, a historian of Mexico and Latin America at Arizona State University.
“When he attained the presidency he formulated a populism of the Cárdenas style. He knew there were various crises. He had been interior minister and he tried to operate with a populist profile in the domestic sphere,” he said.
One of Echeverría’s central objectives, the newspaper El Financiero reported, was the equitable distribution of wealth.
As part of his governance model, he increased spending on infrastructure, created dozens of public trusts and state-owned companies, expanded agricultural and fishing subsidies and provided additional support for the nation’s poor, the newspaper said.
Echeverría also styled himself as a leader of the third world, championing the Charter of Economic Rights and Duties of States, which was approved by the United Nations General Assembly in 1974.
Diplomatic relations with the People’s Republic of China were formalized during his presidency and he strengthened ties with Chile, which was led by leftist Salvador Allende during the first half of his six-year term. After Allende was ousted in a military coup and replaced by Augusto Pinochet in 1973, Echevarría opened Mexico’s doors to Chileans persecuted by the Pinochet regime, even as he persecuted Mexican leftists at home.
Echeverría ran into economic problems such as high inflation and growing foreign debt in the second half of his six-year term, and reforms he pursued didn’t endear him to the population as much as he had hoped.
Meanwhile, his government’s authoritarian tendencies meant he was public enemy No. 1 for some sectors of the population, especially students for whom the Tlatelolco and Corpus Christi massacres were recent memories or even lived experiences. The business community dubbed him a communist for his wealth redistribution efforts and largesse toward the poor.
More than 45 years after he left office, Echeverría remains a controversial and much-loathed figure. Few Mexicans were game to publicly congratulate him on reaching the august age of 100. Many, however, took to social media to condemn the erstwhile president.
Aviña, the historian, denounced the ex-ruler in a Twitter post. “Former Mexican president and butcher of popular movements Luis Echeverría turns 100 today, free and still enjoying the impunity that shields him from prosecution,” he wrote.
“… He’s the world’s oldest genocide perpetrator and a living nightmare for his victims,” said Adela Cedillo, a University of Houston historian. “… His legacy of violence and corruption has marked all of us,” she wrote on Twitter.
“There are many contemporary problems that began in Echeverría’s six-year term but without a doubt his most lasting legacy is state violence,” Cedillo told the news agency EFE.
Citigroup is planning to end its retail banking operations in Mexico, stepping away from Banamex.
The decision by investment banking company Citigroup to sell its Mexican consumer banking business could tilt the sector dominated by global financial giants to more local control as it becomes a test case for the government’s nationalist leanings.
The news of the Banamex unit’s sale or spin off comes at a time of political and regulatory upheaval in Mexico as President López Obrador implements an idiosyncratic agenda of fiscal austerity, social spending and economic nationalism.
Four of the country’s five largest banks are foreign owned. The president on Thursday said he wanted Banamex, which was founded in the 19th century and bought by Citi in 2001, to be “Mexicanized.” He said profits made by foreign companies are often not reinvested in the local economy.
“We’re not against foreigners but we would like it to be Mexicanized,” he said, listing potential Mexican investors including bank owners Carlos Slim, Ricardo Salinas Pliego and Carlos Hank González.
Citi bought Banamex in 2001 but it has been losing market share in recent years and is the third-largest by assets. If sold as a package, the deal could reach up to US $8.5 billion, analysts at JPMorgan estimated in a note. Pablo Riveroll, head of Latin American Equities at Schroders, estimated a valuation between $5 billion and $8 billion.
“It is a big deal because these big franchises don’t come up . . . often,” Riveroll said, adding that incumbents would benefit most from a purchase. “In any domestic banking sector, there are very meaningful synergies for existing players.”
Since Citi’s announcement, the finance ministry has emphasized that it will be rigorous with competition issues, a signal some interpret as complicating a purchase by larger incumbents. The finance ministry said authorities would ensure laws and regulations were applied and avoid concentration in the banking market.
Most analysts believe market leader BBVA, which has a market share of 24%, would face a big hurdle with competition regulators in buying the assets as a package. Spain’s Santander and Hank González’s Grupo Financiero Banorte would also face antitrust scrutiny.
Salinas Pliego’s Banco Azteca — ninth largest by deposits — wasted no time in entering the fray on Tuesday saying he would look at the assets.
Though his existing outfit, which is big in personal credit lending, has a different profile to Banamex, the opportunity to expand his broadcasting and retail empire could be tempting.
Several bankers said on condition of anonymity they believed he was a frontrunner given the president’s comments in support of a Mexican buyer and against market concentration.
Ricardo Salinas Pliego, owner of Banco Azteca, said he would evaluate the idea of buying Banamex.
Azteca, Banorte and BBVA Mexico all declined to comment.
Slim, the telecoms magnate who was once the world’s richest man, could also look at Citi’s assets. His bank Grupo Financiero Inbursa would also likely face fewer competition hurdles than bigger rivals and possibly benefit from cross-selling between his phone company América Móvil and the bank.
Some analysts commented that this deal might not fit his usual pattern of buying assets at distressed valuations. Inbursa declined to comment.
Banorte — the fourth largest by deposits —could have more synergies than other smaller groups, analysts said.
Citi said in its announcement that it would consider a sale or a public market alternative which could mean an initial public offering of the unit. Another option put forward by the head of the finance ministry’s Financial Intelligence Unit was a public-private partnership. Separately, Interior Minister Adán Augusto López said the government was not interested in buying the asset.
Rodrigo Morales Elcoro, professor at the Facultad Libre de Derecho in Monterrey, said competition regulator Cofece would closely analyze individual markets — for example credit cards or mortgages — if an incumbent tried to buy it.
“The scrutiny of Cofece would have to be very detailed with any banking operator that’s already participating in Mexican banking,” Morales Elcoro, a former Cofece board member, said.
In addition to Cofece, the Bank of México and banking regulator CNBV, part of the finance ministry, also have to approve any purchase.
Citi chief executive Jane Fraser on Friday said the company would not comment on speculation about potential buyers or the structure of a deal. She added that the separation process would begin immediately and expected the sales process to start in the spring.
The decision has set off a frenzy in Mexico’s mergers and acquisitions community. Bankers are racing around calling prospective buyers to secure work on what could be the country’s biggest deal in years.
“It’s like being a florist on Mother’s Day,” one investment banker said. “It’s what we’ve dreamed of.”
