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Citigroup Retains IPO Plan for Banamex Despite Grupo Mexico Offer

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Key Takeaways

  • Citigroup will proceed with an IPO of Banamex even after a fresh offer from Grupo Mexico.
  • Grupo Mexico's new bid values Banamex slightly above the earlier deal with investor Chico Pardo.
  • The IPO supports Citigroup's strategy to streamline operations and focus on institutional banking.

Citigroup Inc. (C - Free Report)  has reaffirmed its commitment to move ahead with an initial public offering (IPO) of its Mexican retail unit, Grupo Financiero Banamex, even after receiving a new acquisition proposal from Grupo México, the mining and infrastructure conglomerate led by Germán Larrea. The development was confirmed in a statement obtained by Reuters.

Details of C’s IPO Plan and Grupo México’s Offer

The bank stated it still plans to pursue an IPO for Banamex despite receiving a new offer from Grupo México. The bank emphasized that the agreement previously announced with Mexican billionaire Fernando Chico Pardo and the proposed IPO remain its preferred path to delivering full value for shareholders.

The proposed offer by Grupo México reportedly values Banamex slightly higher than the 25% stake sale agreement Citigroup announced last month with Pardo. C noted it will review Grupo México’s bid responsibly, considering factors such as regulatory approval certainty and the ability to close the transaction.

Under the new proposal, Grupo México offered to purchase 25% of Banamex at 0.85 times book value and the remaining 75% at 0.80x book value, representing a slightly higher valuation than Pardo’s 0.8x agreement.

Citigroup’s decision to prioritize the Banamex IPO aligns with its long-term strategy to streamline operations and focus on core institutional and wealth management businesses. By pursuing a public listing, the bank aims to achieve market-based price discovery and provide broader investor participation.

C’s Prior Efforts to Exit Mexican Consumer Operations

Citigroup’s renewed focus on the Banamex IPO follows a multi-year restructuring effort to reshape its global business portfolio. In December 2024, the company completed the separation of its Mexican institutional banking business from its consumer and small-business operations. Following the split, C began operating through two distinct entities — Grupo Financiero Citi México and Grupo Financiero Banamex.

The move to divest Mexican retail operations was first announced in January 2022 as part of a global simplification plan. This decision was built on an earlier strategic shift in April 2021, when C committed to exiting consumer banking in 14 markets across Asia and EMEA to focus resources on institutional banking, wealth management and markets.

Over the past three years, the bank has exited its consumer banking operations in nine countries, including South Korea, Russia and several Southeast Asian markets, to free up capital and enhance efficiency while expanding its institutional and wealth management hubs in Singapore, Hong Kong, London and the UAE.

C's Zacks Rank & Price Performance

Shares of Citigroup have gained 14.6% in the past three months compared with the industry’s rise of 9.6%.

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Currently, the company carries a Zacks Rank #3 (Hold).

Other Finance Stocks Worth a Look

A couple of better-ranked stocks from the banking space are Evercore Inc. (EVR - Free Report) and Robinhood Markets, Inc. (HOOD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for EVR’s current-year earnings have remained unchanged over the past seven days. The company’s shares have risen 14.0% in the past three months.

Earnings estimates for HOOD for the current year have been revised upward over the past seven days. The company’s shares have gained 58.1% in the past three months.


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