Mexican tycoons Carlos Slim and German Larrea are facing off to acquire the retail division of US-based Citigroup Inc in Mexico after the latest round of bidding left them both as favourites, sources familiar with the matter said.
New proposals were made last week for Citigroup’s Citibanamex consumer banking business, which the bank is selling as part of CEO Jane Fraser’s efforts to exit some international operations and streamline the firm.
The sources did not reveal the amounts of the offers for the unit. One said Citigroup was going to provide candidates with more detailed information about the deal in the coming days, meaning prospective prices could be revised.
Banca Mifel, directed by Daniel Becker, who also chairs the Association of Banks of Mexico, also made an offer but lacked the financial backing to compete with the proposals of Inbursa, by Slim, and Grupo México, by Larrea, detailed one of the sources. .
The sources, who spoke on condition of anonymity to discuss private information, also warned that no agreement was guaranteed with either party and that Citigroup could ultimately decide to sell shares on the Mexican Stock Exchange.
“In line with our process, we are in constant dialogue with various potential buyers and remain committed to pursuing whatever route maximizes value for our shareholders,” a Citigroup spokesperson said.
Inbursa and Grupo México declined to comment. Banca Mifel did not immediately respond to a request for comment.
Backed by Slim, Mexico’s richest person, Inbursa was singled out as a strong contender when Citigroup put Citibanamex up for sale in January. If it wins, Inbursa would become the country’s second largest lender after the local unit of Spain’s BBVA.
However, mining tycoon Larrea has the ability to compete as a candidate to buy Citibanamex, the sources said.
The possible duel comes after other heavyweights left the process. Grupo Financiero Banorte reported on Friday that it had withdrawn, without offering a reason for the decision, joining other withdrawals, such as retail and media tycoon Ricardo Salinas Pliego and Spanish bank Santander.
Mexican authorities, including President Andrés Manuel López Obrador, have pushed for a domestic buyer of the business, which analysts have valued at between $7 billion and $12 billion.