25.3 C
New York
HomeFinanceCitigroup to spin off its Mexico business after efforts to sell unit...

Citigroup to spin off its Mexico business after efforts to sell unit collapse

Jane Fraser, chief executive officer of Citigroup Inc., during an interview for an episode of “The David Rubenstein Show: Peer-to-Peer Conversations” at the Economic Club of Washington in Washington, DC, US, on Wednesday, March 22, 2023. 

Valerie Plesch | Bloomberg | Getty Images

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

The bank expects to complete the separation in the second half of 2024, with a public offering likely to follow in 2025, Citigroup said in a release. It hasn’t yet decided on a listing destination, but a dual listing in Mexico and the U.S. is possible, a source familiar with the plans told CNBC.

“After careful consideration, we concluded the optimal path to maximizing the value of Banamex for our shareholders and advancing our goal to simplify our firm is to pivot from our dual path approach to focus solely on an IPO of the business,” CEO Jane Fraser said in the release.

Fraser has been overhauling the third biggest U.S. bank by assets since taking over in March 2021. One of her first moves as CEO was to announce a dramatic reduction in the bank’s global footprint; plans to sell or IPO Banamex were disclosed in January 2022. Recent media reports said a sale was nearing completion at around a $7 billion valuation.

Citigroup bought Banamex for $12.5 billion in 2001. The bank first said in 2022 that it would be exiting the business, which operates about 1,300 branches with more than 12 million retail clients and about 10 million pension fund customers. It counts approximately 38,000 employees.

The company also said Wednesday it would resume share buybacks this quarter. Shares of Citigroup fell nearly 2% in premarket trading Wednesday.

— CNBC’s Leslie Picker contributed to this report.

This is breaking news. Please check back for updates.


latest articles

explore more