Mexico's president approves of both remaining bidders in Citi's Banamex sale

President Andres Manuel Lopez Obrador said he approves of the two known remaining bidders for Citigroup's Mexican retail unit, after other potential buyers were derailed amid strict conditions put forth by Mexico's leader.

Recent comments by Lopez Obrador criticizing Grupo Mexico SAB had been cast by local news columns as indicating he was opposed to a bid for Banamex by the billionaire German Larrea, who controls the mining, railroad and infrastructure conglomerate.

Citi Plans Exit of Consumer-Banking Operations In Mexico

"We do not veto Mexicans who want to participate and are current with their taxes," Lopez Obrador said during his daily media conference.

Lopez Obrador, known as AMLO, said conditions for the sale he set out earlier this year had been accepted. The president had requested that the buyer be a Mexican who is up to date on tax payments and who commits to keeping Banamex's huge art collection in the country while also agreeing to not carry out mass firings.

That last condition has been seen by analysts as a major reason Grupo Financiero Banorte dropped out of the sale in October, since it would have been prohibited from carrying out the branch closures and staff reductions needed to make the acquisition profitable.

Spain's Banco Santander had a bid rejected in July, just weeks after the president reiterated his preference for a Mexican owner and introduced his condition for no mass firings. The billionaire Carlos Slim's bank Inbursa last week said it was no longer vying for Banamex.

Larrea could take over Banamex since he is up to date on tax payments and is one of the richest men in Mexico, AMLO said Friday. Since Larrea doesn't already have a bank, there would be no mass firings if he buys the bank, the president said.

Banca Mifel, which is led by the head of the country's banking association, also "has possibilities" he said, as well as others. While the president said there are "two or three" prospective buyers remaining, there are only two known bidders at this time.

Bloomberg News
Industry News Consumer banking Politics and policy M&A
MORE FROM AMERICAN BANKER