MEXICO CITY (Reuters) – Mexican President Andres Manuel Lopez Obrador’s administration is studying the possibility of buying a majority of shares in Citigroup’s (NYSE:C) local retail unit known as Banamex. Lopez Obrador said it would be “good business” and that the government is considering creating a public-private association with Citigroup to operate the bank.
Speculation that Grupo Mexico’s owner German Larrea might bow out of the bidding process spread on Monday after a Mexican columnist tweeted he was dropping the bid, citing concerns over the government’s power to take it over. Grupo Mexico told Reuters on Tuesday that a quote in the tweet was false and that it could not comment on the process with Banamex.
The president said he is willing to reach an agreement with Grupo Mexico over a railway in Southern Mexico operated by a unit of the company, which the government is considering taking over. Grupo Mexico has proposed a government payment of more than $534 million for the railway, though the firm would not confirm the figure.
Earlier in May, the president said the government has no problem with Grupo Mexico buying Citigroup’s unit. The government is now studying the possibility of buying a majority of shares in Banamex, which could be a good business move for the country.