One of the most important sales that will take place in the banking sector has returned to the spotlight: the number of possible buyers of is gradually reducing.
This Friday, Grupo Financiero Banorte – one of the main interested in acquiring the bank and the favorite of some analysts – announced that it has more history in Mexico.
But how did we get to this point and how did the story of one of the most complex transactions in recent decades begin?
Citigroup leaves consumer banking
It was on January 12 of this year when Citigroup, parent company and owner of Citibanamex, announced that it was leaving the retail business in Mexico with the sale of the consumer portfolio (credit cards, payroll loans, car and mortgage loans, as well as such as SMEs).
The business of the Afore, the insurance company, as well as the entire infrastructure of the branches and ATMs were also put up for sale. It was an all or nothing: the cultural heritage, the historical archive and the buildings spread throughout the Republic were also sold in a single transaction, nothing in parts.
But Citigroup will not leave Mexico. The US bank will maintain its wealth banking business, that is, with large companies.
The bank wants to take advantage of the nearshoring or friendshoring trend, which consists of companies setting up production plants in countries close to those they want to reach, mainly the United States.
To start up this business, the bank is still waiting for the authorization of its license from the National Banking and Securities Commission (CNBV), which is expected to occur in the coming months. There has even been talk of the possibility of buy from another bank in order to have permission.
“We are in the process of obtaining a license in Mexico and all the alternatives are being evaluated,” said Manuel Romo, general director of Citibanamex, recently.
The Oceanography case
A week after the announcement, a controversy reached a Court in CDMX. Oceanography sought to halt the sale until $5.2 billion was paid to repair the damage. And it is that in 2014, Citibanamex accused the shipping company of defrauding them with more than 500 million dollars without proving the crime.
Now, the shipping company has insisted on stopping the process and even President López Obrador himself came out to say in a morning conference that this complaint would not stop the sale process and that, on the contrary, he would closely monitor the sale of the bank to ensure that the corresponding taxes will be paid.
The president even promised to help the bank unlock the sale.
Those who ‘got off’ the purchase process
As soon as it became known that Banamex was for sale, a series of speculations began about which bank in Mexico could buy it. They did not have to wait long because it soon became known that Banco Azteca, Banorte, Inbursa, Santander, Grupo México and businessman Javier Garza were the first on the list of interested parties and months later it was learned that Grupo Mifel was looking for investors who They will help you with the purchase.
For the official sale process, interested parties could enter a “data room” by signing a strict confidentiality agreement. This room was not open to anyone: Citigroup opened it only to potential buyers or those who met certain requirements.
One of the first to give up was Ricardo Salinas Pliego, who on his Twitter account said that his withdrawal was due to the time and investment required by the bank.
The second to drop out of the contest was Santander. The bank of Spanish origin and owned by Ana Botín, stated that it presented a non-binding offer and that it was Citigroup that announced that it would not continue in the following stages of the process.
Banorte was the third to announce that it was leaving the process this Friday, although it did not give the reasons for its withdrawal due to confidentiality agreements, Marcos Ramírez, Banorte’s CEO, said in a meeting with investors.
The conditions for the sale
Citigroup has some conditions for those who are interested in buying Banamex, in addition to the price (which some estimate at 8,000 million dollars).
The bank led by Jane Fraser is still analyzing between its options making an Initial Public Offering (IPO) and direct sale. If the latter occurs, they will look for the new owner to have a strategy for the more than 39,000 workers of Citibanamex as well as the care of cultural heritage.
But President López Obrador, who has promised to closely monitor the process, said five proposals are on his “wish list.”
1. That the bank remains in Mexican hands.
2. That the buyers have economic solvency.
3. That the potential buyer has no tax debts.
4. That the corresponding taxes are paid for the sale.
5. That the bank’s cultural and artistic collection be for the enjoyment and benefit of Mexicans.
Who is still Interested in buying Banamex?
After the departure of Banorte, the three interested in the purchase of Banamex are:
Inbursa, by Carlos Slim.
Grupo Mexico, by Germán Larrea.
Grupo Mifel, directed by Daniel Becker, current president of the Association of Banks of Mexico.
Sale of Banamex, until 2023?
The bank’s sale schedule stipulates that at the end of this year is when the negotiation of the purchase-sale agreement takes place and until the first months of 2023 it will be when the agreement is signed and who will stay with the bank is announced.
As of the announcement, they begin the transition to the new owner and it will be until 2024 when everything has been integrated.