Citi abandons the proposed sale of Banamex and plans to go public in 2025

Following difficulties with the sale from Mexico’s president, Citigroup Inc. (C) decided to discontinue discussions for a potential $7 billion divestment to a local buyer and sell shares of its Banamex arm in an IPO.

The ruling enables the US bank to resume stock buybacks this quarter, according to a statement released by the New York-based business on Wednesday. Because the transaction, which might have brought in at least $7 billion, was anticipated to temporarily lower capital levels, Citigroup has been delaying share repurchases.

People familiar with the situation stated earlier this month that the US bank was close to agreeing to a deal to sell Grupo Mexico SAB the majority of the Banamex retail operations for about $7 billion.

Last Monday, Andres Manuel Lopez Obrador, the president of Mexico, threw a wrench in the works by seizing control of a train line run by Grupo Mexico. Although Lopez Obrador said that decision had no bearing on his support for the Banamex transaction, it heightened resentment between the president and Germán Larrea, the majority shareholder of Grupo Mexico.

The company that is going public will continue to operate under the local nickname Banamex, BancoNacional de Mexico. The segment serves 10.7 million pension funds, 6.600 businesses, and around 12.7 million retail customers.

According to Citigroup, the offering will comprise the 38,000 employees of Banamex as well as the unit’s credit-card offerings, retail banking products, consumer loans, and residential mortgage loans. The division’s annuities, pension assets, deposits, and commercial banking products will also be included.