Key insights
- Citigroup is preparing for an initial public offering (IPO) of its Mexican unit, Grupo Financiero Banamex, potentially raising over $3 billion in January. This move is part of CEO Jane Fraser's strategy to exit international consumer banking operations. Citigroup has already reduced its stake in Banamex through private sales and plans to lower it below 50% before the IPO. Major Wall Street banks are expected to participate in underwriting the offering.
Investing.com -- Citigroup (NYSE:C) is lining up major Wall Street banks for an initial public offering of Mexico’s Grupo Financiero Banamex that could raise more than $3 billion, Bloomberg reported exclusively, citing people familiar with the matter.
Citigroup is expected to lead the offering, with Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) also working on the transaction. Citigroup and Banamex are targeting January for the listing, according to the report.
The banks are still assessing how much of Citigroup’s remaining Banamex stake could be sold before the IPO. Smaller stake sales could take place ahead of the listing, the people said.
Plans remain under discussion, meaning details could change and more banks could join the group handling the offering. Representatives for Citigroup, Banamex, Bank of America, Goldman Sachs and JPMorgan declined to comment to Bloomberg.
The planned IPO forms part of Citigroup Chief Executive Jane Fraser’s broader withdrawal from consumer banking operations in several international markets.
Citigroup sold 25% of Banamex to Mexican billionaire Fernando Chico Pardo last year. It later sold another 24% to investors including General Atlantic and Blackstone (NYSE:BX), reducing its ownership to about 51%.
Citigroup Chief Financial Officer Gonzalo Luchetti said earlier this month that the bank planned to reduce its Banamex ownership below 50% before taking the Mexican lender public.
Banamex also appointed Edgardo del Rincon, the former head of Banco del Bajio, as chief executive earlier this year.
A listing of more than $3 billion would mark the next major step in Citigroup’s separation from its Mexican retail banking operations after the series of private stake sales.
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