© Reuters. FILE PHOTO: Mexico’s President Andres Manuel Lopez Obrador speaks during a news conference at the Secretariat of Security and Civilian Protection in Mexico City, Mexico March 9, 2023. REUTERS/Henry Romero/
MEXICO CITY (Reuters) – Mexican President Andres Manuel Lopez Obrador on Friday said the government could acquire up to half of the Mexican unit of Citigroup (NYSE:) after the U.S. bank announced plans this week to pursue an initial public offering of the business.
Lopez Obrador, speaking at a press conference, noted that the bank had also said it wants the unit known as Banamex to have Mexican shareholders.
Citi on Wednesday said it was planning an IPO for the Mexican unit, abandoning earlier plans for a sale, prompting Lopez Obrador to announce that the Mexican government could invest in Banamex and had up to $3 billion at its disposal.
The president, who said the government had expected to earn around $2 billion in taxes from the Banamex sale, returned on Friday to the possibility of taking a stake, noting that the unit had expected to be sold for around $7 billion.
“If the government puts up half, or $3 billion, that leaves $2 billion for Mexican shareholders of all levels,” he said.
He also indicated Citi would have to pay taxes on the IPO.
Lopez Obrador added that he had seen Citi communications saying it wants Mexican shareholders for the unit, amid speculation over where it unit would be listed.
Citi had been in talks to sell Banamex to Mexican billionaire German Larrea’s conglomerate Grupo Mexico with sources saying they had been close to a deal.
Tensions flared up after Lopez Obrador moved last Friday to expropriate part of one of the company’s rail lines.
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