Mexican President Andrés Manuel López Obrador is making it very difficult for Citigroup to get a price close to the $12.5 billion it paid for Banamex two decades ago, Bloomberg reports.
AMLO demanded that the potential buyer be local, not foreign, and that it be prohibited from laying off staff. The historically significant art collection owned by Banamex should also be preserved by the buyer, the chairman said.
The sale of the collection separately from the bank and its assets is not currently under consideration, but the announcement nevertheless raised a wave of concern over the collection, which is heavily weighted to ensure the representation of artists and Mexican themes and which now has more than 6,000 pieces including works by Frida Kahlo, Diego Rivera, Clemente Orozco and several other artists. None of this is allowed out of the country without government permission.
Founded in 1972, initially as a way to purchase mostly Mexican artwork to decorate Banamex branches, the collection is managed by Formento Cultural Banamex.
The main body of the work is in the 18th century Palacio Iturbide in Mexico City.
In Mérida, the Banamex Casa de Cultura at Casa de Montejo circa 1549 is a jewel in the society’s crown. Its museum has hosted prestigious traveling exhibitions of the collection for years.
But those treasures hang over Citigroup bankers tasked with securing the highest possible price for the bank’s most valuable franchise in Latin America. Such requests would certainly be taken into account in the purchase price.
The government has no stake in Banamex. But prospective new owners can ignore AMLO at their peril. Her administration has shown a willingness to increase pressure on companies that challenge her, Bloomberg notes.
Several investors have emerged as bidders for the bank: Grupo Financiero Banorte, Carlos Slim’s Grupo Financiero Inbursa, mining magnate German Larrea and Grupo Financiero Mifel, said Bloomberg, which characterizes the situation as the talk of the banking world.
Banco Santander’s $6 billion bid in Spain was reportedly rejected, meaning at least one foreign bank was out of the running.
Citigroup CEO Jane Fraser hinted in mid-July that a final deal was still a long way off.