Citi’s Mexico unit seen selling above $7 billion as Slim eyes bank

Citigroup’s Mexican unit, Banamex, is likely to attract offers of about $7 billion to $8 billion as the field of bidders narrows, according to people familiar with the matter.

Grupo Financiero Banorte, Carlos Slim’s Grupo Financiero Inbursa, the mining tycoon German Larrea and Grupo Financiero Mifel are still in the running, according to the people, who asked not to be identified because the talks are private.

Jeoffrey Guillemard/Bloomberg

Slim, with a net worth of $73.5 billion, and Larrea — who when combined with his family has about $24.3 billion, according to the Bloomberg Billionaires Index — are Latin America’s two richest people.

Representatives for Citigroup, Banorte and Inbursa declined to comment. Representatives for Mifel and Larrea’s Grupo Mexico didn’t respond to requests for comment. The sale process remains underway and offers for the unit may change, the people said.

New York-based Citigroup launched the sale of its retail Banamex unit at the start of the year after its share of Mexican deposits dropped nearly 10% in the two decades since the 2001 purchase of Banco Nacional de Mexico.

Banorte, which is Mexico’s second-biggest bank by total loans, trailing only Banco Bilbao Vizcaya Argentaria, has been seen as the top contender for Banamex.

Read More: Banorte Tops Analysts Picks to Nab Citi’s Mexico Retail Bank

Banco Santander said on July 22 it was eliminated from the bidding process. A $6 billion offer from the Spanish bank was rejected by Citigroup, the people said. A representative for Santander declined to comment further.

The sale process has been sluggish, according to people close to the talks. Meanwhile, Citigroup has considered a deal to buy Deutsche Bank’s Mexican unit to more quickly obtain a license for operations there focused on institutional clients and private banking.

Frank Aguado, the head of investor relations at Inbursa, said last week that the company is interested in purchasing Banamex only at a “reasonable” price. He told analysts on a call that Inbursa is inviting other Mexican businessmen to join its bid, but that there is no set group yet.

Larrea, who controls Grupo Mexico, a copper miner, has hired Grupo Aeromexico Chairman Javier Arrigunaga as well as Pedro Aspe to advise him, the people said. Aspe served as Mexican finance minister when Banamex and other lenders were reprivatized in 1991 after being nationalized during a financial crisis a decade earlier. 

Arrigunaga had led Citibanamex from 2010 until he stepped down in 2014 amid the fallout of allegations of $400 million in fraudulent loans to the oil-services provider Oceanografia. The two join as advisers along with Barclays, which Bloomberg previously reported was helping Larrea with his bid.