Citi gains control over Deutsche Bank's license in Mexico
In a surprising turn of events, American banking giant Citi has abandoned its plans to sell its Mexico retail operations, following the Mexican government's potential interest in acquiring Citibanamex. This change of heart came after the government of President Andrés Manuel López Obrador expressed an analysis of a potential bid for the bank, should negotiations with Grupo Mexico for a different deal collapse.
The saga began last year when Citi first agreed to acquire Deutsche Bank's Mexican banking license. The acquisition was intended to help Citi set up a separate institutional bank in Mexico. However, Deutsche Bank had already begun phasing out its retail operations in Mexico as early as 2016.
Grupo Mexico emerged as a front-runner in a potential deal for Deutsche Bank's Mexican banking license, worth approximately $7 million. The deal, reportedly, fell apart due to President López Obrador seizing control of a railroad line operated by Grupo Mexico.
With the deal with Grupo Mexico off the table, Citi saw an opportunity to secure Deutsche Bank's Mexican banking license. The purchase allows Citi to avoid the lengthy process of applying for a license on its own. The financial terms of the deal were not disclosed.
President López Obrador made it clear that any potential sale must adhere to certain conditions. These included no mass layoffs, the involvement of Mexican investors, the buyer being current on its taxes, and the bank's art collection remaining in Mexico. These conditions, along with the President's expressed opinions, are believed to have soured the deal last year.
In a move away from its earlier plan to sell its Mexico retail operations, Citi now plans to list Banamex in an initial public offering in 2025. This decision is likely a response to the government's interest in a potential bid for Citibanamex.
Despite the setbacks, Citi is not deterred. The acquisition will help Citi separate its institutional and private business from its consumer, small-business, and middle-market operations in Mexico. As for Deutsche Bank, they rebuilt their Mexico office last year, focusing on offering derivatives to corporate clients in the country.
However, there are no search results indicating which institution Deutsche Bank sold its banking license contract in Mexico to in 2022 through a superiority procedure. The saga of Citi's Mexico retail operations continues to unfold, with the future of Citibanamex still uncertain.
Read also:
- International powers, including France, Germany, and the UK, advocate for the reinstatement of sanctions against Iran.
- Companies urged to combat employee resignation crisis, as per findings from the Addeco Group
- Republicans advocate Trump's domestic policy plans in Iowa, though some business owners remain skeptic
- International discussions on plastic waste management might be shaped by China pledging to reduce plastic production levels.
