Story
Citigroup Targets Over $3 Billion Banamex IPO for January, Bloomberg Reports
Summary
Citigroup is reportedly preparing for an initial public offering of its Mexican retail unit, Banamex, that could raise over $3 billion and is targeted for January. The move represents a major step in the bank's multi-year strategy to exit international consumer banking operations.
Citigroup Inc. is assembling a team of major Wall Street banks for an initial public offering (IPO) of its Mexican consumer banking unit, Grupo Financiero Banamex, that could raise more than $3 billion, according to a Bloomberg report citing people familiar with the matter. The U.S. banking giant is reportedly targeting a January listing for the business.
The Offering Details
Citigroup is expected to lead the transaction, with Bank of America Corp., Goldman Sachs Group Inc., and JPMorgan Chase & Co. also working on the deal, the report said. The sources indicated that plans are still under discussion, meaning the offering's final details could change and more banks might be added to the syndicate.
Representatives for Citigroup, Banamex, Bank of America, Goldman Sachs, and JPMorgan all declined to comment to Bloomberg. The banks are reportedly still assessing the size of the stake Citigroup will sell in the IPO, with the possibility of smaller private stake sales occurring before the public listing.
Strategic Rationale and Ownership
AdThe planned IPO is a key component of CEO Jane Fraser's broader strategic overhaul, which involves exiting consumer banking operations in numerous international markets to streamline the company. This move follows a series of transactions that have already reduced Citigroup's holding in its Mexican subsidiary.
Citigroup's ownership in Banamex currently stands at approximately 51% after several recent sales:
- Last year, it sold a 25% stake to Mexican billionaire Fernando Chico Pardo.
- It later sold another 24% to a group of investors that included General Atlantic and Blackstone Inc.
Earlier this month, Citigroup Chief Financial Officer Gonzalo Luchetti stated that the bank intends to reduce its Banamex ownership below 50% before proceeding with the public offering. The separation process also included the appointment of Edgardo del Rincon, former head of Banco del Bajio, as Banamex's chief executive earlier this year.
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