Citigroup is close to selling most of its retail services operations of its Panamax unit in Mexico to Grupo Mexico for about $7 billion, according to people familiar with the matter.
The US banking giant intends to keep part of the unit and will have the option of selling it later to Grupo Mexico or offering it on the stock exchange, said the people, who asked not to be identified discussing internal deliberations.
Citigroup announced last year that it was looking to exit its retail, small business and mid-cap banking divisions in Mexico while keeping its institutional operations.
Several bidders have been competing for Panamax for months. Investors are closely watching Citigroup’s progress in selling its stake, as the New York-based company said any potential deal would hurt capital levels temporarily.-
This led the banking group to postpone share buybacks in recent quarters.-
Jane Fraser’s plan to restructure Citigroup and outperform competitors
Citigroup executives have long emphasized that they are considering either an initial public offering or a sale of the unit, as part of CEO Jane Fraser’s broader strategy to sell off more than a dozen divisions serving international individuals to refocus Citigroup on products. Institutional and personnel service activities in the United States.
Representatives for Citigroup and Grupo Mexico (the conglomerate run by mining magnate German Larrea) declined to comment.