Carlos Slim’s Inbursa Pulls Out of Bidding for Banamex

The decision was by mutual agreement, after Inbursa had presented a non-binding offer to acquire Citigroup’s retail banking business in Mexico

Inbursa is the third potential buyer to pull out, following Santander and Banorte.
November 23, 2022 | 07:31 PM

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Mexico City — Grupo Financiero Inbursa, the banking arm of Mexican billionaire Carlos Slim’s business emporium, announced Wednesday its withdrawal from the process to buy Banamex, the consumer banking unit that Citigroup is seeking to sell in Mexico as part of a turnaround of its global business.

“Inbursa confirms that following its non-binding proposal for the acquisition, the parties mutually agreed that Inbursa will not continue in the next stages of the process,” Inbursa said in a statement sent to the Mexican Stock Exchange (BMV).

The Banamex sale process is being closely followed by the Mexican government. President Andrés Manuel López Obrador has established conditions for the operation, such as the bank remaining in Mexican hands, the preservation of the bank’s cultural heritage in the country, which includes historic buildings, and the preservation of jobs.

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Given these conditions and his financial capacity, Carlos Slim, Mexico’s richest man, was seen as a likely buyer.

With Inbursa’s exit, at least two other groups remain in the process, one led by Daniel Becker, director of Grupo Financiero Mifel, and the other by Germán Larrea, a mining magnate with no experience in the banking sector.

Mifel, a financial institution with 79 branches, has been publicly open about its interest in the acquisition, and its progress in the process. Its CEO Daniel Becker confirmed to Bloomberg Línea in October that it is in the bidding for Banamex, which has around 1,300 branches.

In contrast, Grupo México, Larrea’s mining and railroad conglomerate, has remained tight-lipped on the matter. It has not even clarified whether the reports regarding the interest of Larrea, who is characterized by his low public profile, will be made through the company or through another investment vehicle.

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Inbursa is the third entity to make public its exit from the Banamex acquisition process. Banco Santander, owned by Ana Botín, and Grupo Financiero Banorte, also recently withdrew from the bidding process.

After the decision not to continue, Inbursa said it will now focus on accelerating technological development and “high growth potential and market share in Mexico”.

Citigroup (C) announced at the beginning of the year its intention to sell Banamex, which it has called “a jewel” that no longer fits into its plans.

The bank, headed by Jane Fraser, seeks to become a financial entity for large transnational companies, and has put its retail business up for sale in other parts of the world.

Once Citi finalizes the sale of Banamex, which could take place next year, it will continue to operate in Mexico through its institutional banking business.