(Bloomberg) --Citigroup Inc. is nearing a deal to sell most of its Banamex retail operations to Grupo Mexico for roughly $7 billion, according to people familiar with the matter.
The Wall Street giant will retain a portion of the unit, and will have the option of later selling it to Grupo Mexico or listing it on public markets, the people said, asking not to be identified discussing internal deliberations.
Citigroup last year announced that it was looking to dispose of the consumer, small-business and middle-market banking divisions in Mexico, while holding on to the institutional operation.
Several bidders have been vying for Banamex for months. Investors are closely watching the lender's progress on the divestiture, because the New York-based firm has said any potential deal will temporarily hurt capital levels. That has led the bank to hold off on restarting share buybacks in recent quarters.
Citi executives have long stressed that they were exploring both an initial public offering or a sale for the unit, which is part of Chief Executive Officer Jane Fraser's broader strategy of disposing of more than a dozen international consumer divisions to refocus Citi on institutional offerings and the firm's U.S. retail business.
Representatives of Citi and Grupo Mexico, the conglomerate run by mining magnate German Larrea, declined to comment.
