Grupo México offers to acquire 100% of Banamex, shares drop over 15%

Grupo México's shares dropped over 15% following its binding offer to acquire up to 100% of Grupo Financiero Banamex from Citi, causing a significant decline in the Mexican Stock Exchange index. Investors expressed concern over the move into the financial sector, which is a departure from Grupo México's traditional mining and infrastructure businesses, with analysts citing increased uncertainty and lack of clear synergies. The acquisition proposal includes paying a multiple of 0.85 times book value for 25% and 0.80 times for the remaining 75%, with the possibility of acquiring only 75% if the Chico family retains their 25% stake. Grupo México emphasized its goal to boost credit access for Mexican families and businesses while ensuring an orderly transition that preserves Banamex’s workforce and management expertise. The company's strategy has raised questions about its long-term focus and capital allocation. This deal represents a major shift for Grupo México and has triggered one of the worst trading sessions for its shares this year.