Mexican President Andrés Manuel López Obrador is making it very difficult for Citigroup to fetch a price anywhere close to the $12.5 billion it paid for Banamex two decades ago, Bloomberg reports.
AMLO demanded the would-be buyer be local, not foreign, and be banned from laying off staff. The historically important art collection that Banamex owns would also have to be preserved by the buyer, the president says.
The sale collection separately from the bank and its assets is not currently under consideration, but the announcement nonetheless prompted a wave of concern over the collection, which is heavily weighted to ensure Mexican artists and themes are represented and which now numbers more than 6,000 items including works by Frida Kahlo, Diego Rivera, Clemente Orozco, and several other artists. None of it is allowed to be taken out of the country without permission from the government.
Founded in 1972, initially as a means to buy predominantly Mexican-produced artworks to decorate Banamex branches, the collection is managed by the Formento Cultural Banamex.
The main body of work is housed in the 18th-century Palacio Iturbide in Mexico City.
In Mérida, the Banamex Casa de Cultura at the circa-1549 Casa de Montejo is a crown jewel in the corporation’s crown. Its museum has for years hosted prestigious traveling exhibits from the collection.
But these treasures weigh on Citigroup bankers tasked with getting the highest possible price for the bank’s most valuable franchise in Latin America. Such demands would certainly be considered in the purchase price.
The government has no stake in Banamex. But the eventual new owners can ignore AMLO at their peril. His administration has shown a willingness to ratchet up pressure on companies that challenge it, Bloomberg notes.
Multiple investors have emerged as bidders for the bank: Grupo Financiero Banorte, Carlos Slim’s Grupo Financiero Inbursa, mining tycoon German Larrea and Grupo Financiero Mifel, said Bloomberg, which characterizes this situation as the talk of the banking world.
Spain’s Banco Santander’s $6 billion offer was reportedly rejected, which means at least one foreign bank was out of the running.
Citigroup CEO Jane Fraser implied in mid-July that a final deal was still a long way off.
