Banorte shares gain 2.73% on the BMV, after abandoning the Citibanamex purchase process

The shares of Grupo Financiero Banorte (GFNORTE) ended the session this Friday with an increase of 2.73% in the Mexican Stock Exchange (BMV)after announcing that it withdrew from the process to acquire Citibanamex’s retail and corporate banking business.

“Banorte does not continue in the process organized by Citigroup in relation to the potential sale of part of Citibanamex’s operations in Mexico”, informed the issuer in a brief statement published in the stock exchange center before the opening of the local stock market.

In the first hours of negotiations on October 21, the securities of the financial group rose to a maximum price of 157.99 pesos, equivalent to an increase of 3.84% compared to Thursday’s session; towards the close of the market it moderated its performance to end at 156.3 pesos per unit.

The announcement of Banorte It was awarded by the stock market, said Gilberto García and Manuel Parra, analysts at Barclays, because it eliminates the concern about the implications that this transaction would have.

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“We see this as a positive move as it provides a key assurance that the company will not engage in overly aggressive trading… The announcement is a key final confirmation, so we would expect a positive stock market reaction,” they said.

On January 11, 2022, Citigroup announced that the retail and corporate banking businesses of Citibanamex in Mexicowould maintain only the institutional division, all this as part of its global growth strategy.

Speculation arose as to how much the businesses for sale might be worth. Bank of America estimated a valuation of between $12.5 billion and $15 billion. For its part, BBVA calculated between 9,534 and 13,966 million dollars.

Banorte was one of the main parties interested in acquiring the businesses of Citibanamex. Last April he announced his plans to present an eventual proposal, but it was not until June of this year that he put a “non-binding” proposal on the table. He finally gave up.

GFNORTE It has positioned itself as the second largest financial group in Mexico. In 1986, after the merger of Banco Mercantil de Monterrey and Banco Regional del Norte, Banco Mercantil del Norte (Banorte) was born.

By 1992, a group of businessmen, led by Roberto González Barrera, bought Banorte. The following year, he launched an acquisitions career. The first was Afin Grupo Financiero, in 1993.

More came: Banpaís (1997); Bangrow (2001); Inter National Bank, the remittance company, Uniteller in the United States (2006); the remittance company, Motran from the United States (2007).

By 2011, Banorte and Ixe merged, with which it became the third banking institution in Mexico.

Another relevant operation was in 2012, when Banorte Generali merged with Afore XXI of the Mexican Social Security Institute (IMSS) at 50 percent. Already in 2013, Afore XXI Banorte was consolidated as the largest administrator of retirement funds in Mexico, after the acquisition of Afore from BBVA Bancomer.

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