Citigroup spins off its Mexico business after unit sale fails

Citigroup CEO Jane Fraser is interviewed for an episode of “The David Rubinstein Show: Peer-to-Peer Conversation” at the Economic Club of Washington in Washington, DC, U.S. on Wednesday, March 22, 2023.

Valerie Plesch | Bloomberg | Getty Images

Citigroup It said on Wednesday it planned an initial public offering of its Mexican business Banamex, undermining a 16-month effort to find a strategic buyer for the unit.

Citigroup said in a statement that the bank expects to complete the spin-off in the second half of 2024, with a possible public offering in 2025. releaseA source familiar with the plans told CNBC that the company has not yet decided on a listing destination, but a dual listing in Mexico and the United States is possible.

Chief Executive Officer Jane Fraser said: “After careful consideration, we have concluded that the best path to maximize Banamex value for shareholders and advance our goal of simplifying the company is to move from our dual-path approach to An IPO focused solely on the business.” In a Press release.

Citigroup has been exploring the possibility of selling the business. Just this month, media reports said the deal was close to being finalized, valuing it at about $7 billion.

Citigroup bought Banamex in 2001 for $12.5 billion.the bank Firstly By 2022, it will exit the business, which operates about 1,300 branches, has more than 12 million retail customers and about 10 million pension fund customers. It has approximately 38,000 employees.

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

——CNBC Leslie Peake contributed to this report.

This is breaking news. Please check for updates.

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