Citigroup is spinning off its Mexico business after efforts to sell the ailing unit

  • Citigroup said on Wednesday it plans to pursue an initial public offering for its Banamex business in Mexico, derailing a 16-month effort to find a strategic buyer for the unit.
  • The bank said it expects to complete the chapter in the second half of 2024, with a public offering likely to follow in 2025.
  • The silver lining in the bank’s pivot is that it will allow the company to resume a “modest” level of share buybacks this quarter.

Jane Fraser, CEO, Citigroup Inc. , during an interview for an episode of “The David Rubenstein Show: Peer-to-Peer Conversations” at The Economic Club of Washington, D.C., United States, on Wednesday, March 22, 2023.

Valerie Bleach | bloomberg | Getty Images

Citigroup said on Wednesday it plans to pursue an initial public offering for its Banamex business in Mexico, derailing a 16-month effort to find a strategic buyer for the unit.

Citigroup said the bank expects to complete the chapter in the second half of 2024, with a public offering likely to follow in 2025. launch. A source familiar with the plans told CNBC that it has not yet decided on the destination of the listing, but a dual listing in Mexico and the United States is possible.

Citigroup shares fell 3.4 percent in early trade.

“After careful consideration, we have finalized the optimal path to maximize Banamex value for our shareholders and further our goal to streamline our company is to shift from our dual-track approach to focus solely on the company’s IPO,” said Jane Fraser, CEO of the company. in Release.

Fraser has overhauled the third-largest US bank by assets since taking office in March 2021. One of her first steps as CEO was to announce a significant reduction in the bank’s global footprint. Plans to sell or IPO Banamex were a statement In January 2022. Recent media reports say a sale is about to close at a valuation of around $7 billion.

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Citigroup bought Banamex for $12.5 billion in 2001. It has 38,000 employees and 1,300 subsidiaries, with more than 12 million retail customers and about 10 million pension customers, according to Citigroup.

The silver lining on the bank’s pivot is that it will allow the company to resume a “modest” level of share buybacks this quarter; He had halted the buybacks because the sale was expected to affect the bank’s capital levels.

CNBC channel Leslie Baker Contribute to this report.

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