Bloomberg — Tycoon German Larrea’s conglomerate Grupo Mexico SAB (GMEXICOB) is in advanced talks on a potential acquisition of Citigroup Inc.’s (C) Mexican retail bank Banamex, people with knowledge of the matter said.
The mining magnate is trying to finalize terms of a potential deal with Citigroup, the people said, asking not to be identified because the information is private. No final agreements have been reached, and talks could still fall apart or another buyer could emerge, the people said.
Citigroup could also consider an IPO of Banamex, the people said.
Grupo Mexico shares fell as much as 4% at the open in Mexico City before paring losses to around 1.4% as the country’s benchmark index slipped 0.4%. Grupo Mexico’s mining division is its largest business, but it also runs railroads and has an infrastructure unit. The addition of a bank may lead investors to widen the discount they put on the complex company.
New York-based Citigroup launched the sale of Banamex in January, in what could become one of the year’s biggest banking deals. The number of bidders has dwindled amid a set of conditions laid out by President Andres Manuel Lopez Obrador, including that the new owners refrain from carrying out mass firings.
A representative for Citigroup declined to comment, while a spokesperson for Grupo Mexico didn’t immediately respond to a request for comment.
A consortium backed by Mexico’s Banca Mifel SA and US investment firm Apollo Global Management Inc. has also been pursuing a deal for Banamex. It was seeking around $2 billion of financing from a group of lenders to support the bid, Bloomberg News reported last month.
--With assistance from Jenny Surane and Jan-Henrik Förster
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