Citigroup has agreed to sell a further 24% stake in its Mexican retail banking arm, Grupo Financiero Banamex, for about $2.5bn, according to a report by Bloomberg, as it continues to unwind its consumer banking footprint in the country.
The Wall Street bank said investors have agreed to buy 499m shares in Banamex for around MXN43bn, subject to regulatory approvals. The buyers include funds managed by Blackstone and General Atlantic, alongside Brazil’s Banco BTG Pactual and several institutional investors. The individual stakes are all below 5%.
Citigroup added that the transaction was struck at around 0.85x book value, a small premium to the valuation paid last year when Mexican billionaire Fernando Chico Pardo acquired an initial 25% stake for MXN42bn ($2.43bn). General Atlantic said the deal represents its largest growth equity investment in Mexico to date.
The latest sale reduces Citigroup’s holding in Banamex as Chief Executive Jane Fraser pushes ahead with plans to step back from the retail business. The bank said it does not expect to sell additional stakes this year, but reiterated that an initial public offering of Banamex remains under consideration, subject to market conditions and regulatory approvals.
