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Why does Banamex still have no new owner?

2023-02-17T10:37:42.311Z


More than a year after the announcement of the sale of the fourth bank due to assets in Mexico, Citigroup has not yet made a decision on the future of the institution


A Banamex branch in the historic center of Mexico City.Jeoffrey Guillemard (Bloomberg)

Numbers and more numbers.

Financial analysts say that in this last mile for the sale of Banamex, the details of the purchase contract between Citigroup and the bidder who has the most options to take over the bank are being refined, in this case, the billionaire Germán Larrea.

The second richest man in Mexico is emerging as the winner of the bid for the bank with a

century of history, however, the fine print of the contract still remains to be defined: the level of liabilities —including the Oceanografía

case—

, security licenses, contracts and information technology.

The calculations of the financiers indicate that the offers for the bank are around 10,000 million dollars.

Benjamín Álvarez, an analyst at CI Banco, explains that the purchase process is in line with the US corporate forecasts that outlined a definition for the first quarter of 2023. The specialist warns that, unlike other sectors, selling a bank has a complexity that in itself makes it difficult to find a bidder, for this reason it is not yet ruled out that it may be the businessman Germán Larrea, the director of Banca Mifel, Daniel Becker, or even a public offering of shares on the Mexican Stock Exchange. Values.

In recent weeks, agencies such as

Reuters

have announced that, in his eagerness to win, the mining businessman, Germán Larrea, had obtained financing of 5,000 million dollars with global banks to acquire Banamex.

In this case, Álvarez warns, it is that if the offer is backed with debt, it will surely be in a scenario of high rates.

“More than it being a problem of not being able to find financing, it will be a difficult move given the scenario of high rates,” he mentions.

To refine the details of this transaction, the headquarters of both Citi and Grupo México have been in constant negotiations.

The matter is not minor, on the table is the acquisition, the consumer banking and Banamex companies, the insurance, the thousand branches, the retirement fund manager, its architectural and cultural heritage and the valuable asset that a brand with more than a century of history, but also its liabilities and contingent problems.

The analyst, Jorge Sánchez Tello, explains that the transaction occurs at an appropriate time given the complexity of the purchase.

“It is a process in which several interested parties have been analyzed and in the end there are two left.

There is one that has a certain advantage because it is the one that has a certain exclusivity to further analyze certain private information about the bank and its liabilities.

But it goes in time and form.

It is the normal time it takes to sell a company of this size and because of the implications it carries.

Let's remember that within Citibanamex there are several business areas as if they were several companies, hence its complexity”, he explains.

“The topic of Oceanography is part of the liabilities that the interested parties analyze.

Generally, the companies or entrepreneurs who are going to buy any company analyze these particular situations of certain liabilities and the time it takes for their analysis by the accounting firms and lawyers hired by those interested in buying is normal.

That is why the exclusivity period that they gave Germán Larrea of ​​90 days to see this and other issues is normal.

Everything is going in due time and form and surely it can take a few more weeks ”, he settles.

With 11.6% of the assets of the Mexican financial system, Banamex is the fourth bank in Mexico, only behind BBVA México, Santander and Banorte according to figures from the National Banking and Securities Commission (CNBV).

The institution has undergone numerous transformations during its 138-year history: from nationalization, through the privatization of the bank in the 1990s and until its sale to the American Citigroup in 2001. Now, after two decades, the American conglomerate will pass the baton to it to a new owner.

It was in January 2021 when the US conglomerate dropped the bombshell: it would stop operating consumer banking and for small and medium-sized companies in the country as part of its global strategy of divestment of non-strategic assets.

With the announcement came questions about the other lines of business: the Afores, the cultural heritage of the millennial institution, the future of the more than 33,000 workers and the network of 1,300 branches.

From a distance, it will be the new owner of Banamex who will have to answer these questions and those that derive from the transition process.

Although the transaction is purely private, President López Obrador has not wasted an opportunity to express his opinions on the sale.

The last resolution will be from the US bank, but in the face of a purchase with so many edges, the president has not missed the opportunity to throw some darts and suggest that the next new owner be a Mexican, be up to date with his taxes, keep everyone as much as possible employees and commit to preserving Banamex's cultural heritage in the country.

The most recent statement in this regard by the Executive trusted that Citi would give a ruling on the sale very soon.

In the last year, the contest for the fourth financial institution in the country has gone through different stages: at the beginning, the main players on the Mexican banking board expressed their interest in participating in the process, but as the process progressed, it became It was decanted until it reached three bidders: the magnate Carlos Slim, the businessman Larrea and the banker and director of Banca Mifel, Daniel Becker.

In the end, in the bid for Banamex only the last two have remained firm and it will be a matter of days to see what Citi's final decision will be.

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Source: elparis

All news articles on 2023-02-17

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