Story
Citigroup Targets Over $3 Billion IPO for Banamex in January, Bloomberg Reports
Summary
Citigroup is reportedly working with major Wall Street banks to prepare an initial public offering for its Mexican unit, Grupo Financiero Banamex, that could raise more than $3 billion. The move is a key part of CEO Jane Fraser's strategy to streamline the bank's global operations.
Citigroup Inc. (NYSE: C) is preparing an initial public offering for its Mexican unit, Grupo Financiero Banamex, that could raise over $3 billion and is targeted for a January listing, according to a Bloomberg report citing people familiar with the matter. The bank is working with several major Wall Street firms on the planned transaction, which represents a key milestone in its strategic overhaul.
Offering Details
Citigroup is expected to lead the offering, with Bank of America Corp. (NYSE: BAC), Goldman Sachs Group Inc. (NYSE: GS), and JPMorgan Chase & Co. (NYSE: JPM) also participating as underwriters, the report stated. The underwriting syndicate could expand as the listing date approaches.
According to the sources, the banks are still evaluating the precise stake to be sold. A smaller, private sale of shares could potentially precede the public listing. Representatives for Citigroup, Banamex, and the other banks involved declined to comment to Bloomberg.
A Key Step in Citi's Restructuring
AdThe planned IPO is a central component of CEO Jane Fraser's strategy to simplify Citigroup's global footprint and exit most of its international consumer banking businesses. This move allows the bank to focus on its more profitable institutional and wealth management divisions.
Citigroup has already been reducing its ownership in Banamex ahead of the public offering. The bank's stake is currently around 51% following two significant private sales:
- A 25% stake sold to Mexican billionaire Fernando Chico Pardo last year.
- Another 24% sold to an investor group including General Atlantic and Blackstone Inc. (NYSE: BX).
Citigroup's Chief Financial Officer, Gonzalo Luchetti, stated earlier this month that the bank intends to reduce its holding to below 50% before Banamex goes public. In another preparatory move, Banamex appointed Edgardo del Rincon, the former head of Banco del Bajio, as its new chief executive officer earlier this year.
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