AMLO Says Mexico Could Offer $3 Billion For a Stake in Banamex

(Bloomberg) -- Citigroup Inc.’s Banamex “could represent a good opportunity” for Mexico to own a bank, President Andres Manuel Lopez Obrador said Wednesday after the US bank announced that it would halt a direct sale of the unit.

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AMLO, as the president is known, said he had been informed on Tuesday that talks had halted between Citi and billionaire German Larrea’s Grupo Mexico SAB, which was close to clinching a $7 billion deal for the unit. “That’s between them,” he said.

Citi on Wednesday said it would stop talks to sell the bank after over a year of negotiations, and that it now plans to sell shares of Banamex in an initial public offering. That opens room for the Mexican government to seek to be a partner in the bank, mused AMLO in his daily morning presser, adding that the country could spend as much as $3 billion on a stake in Banamex.

He added that he would reach out to the Finance Minister to start talks on the possibility of a private-public partnership with Citi.

Read More: Citi Walks Away From Banamex Sale Plan That Bore AMLO’s Scrutiny

In an explanation of his math, the president said that if Citi expected to get $7 billion from the sale, about $2 billion of that amount would be made up of taxes. Of the remaining $5 billion, the government could contribute $3 billion for a stake and the rest could be “sold in shares to Mexicans” through the IPO.

“Almost every country has a bank, we don’t,” he said.

Lopez Obrador threw a wrench in the negotiation last week by seizing control of a railroad line operated by Grupo Mexico. While the president said that decision didn’t affect his support for the Banamex deal, it added to tension between the president and Grupo Mexico’s controlling shareholder Larrea.

Read More: Billionaire’s Spat With AMLO Threatens Investor Appeal in Mexico

Grupo Mexico declined to comment on the Banamex sale or on AMLO’s comments on Wednesday.

--With assistance from Carolina Gonzalez, Maya Averbuch and Michael O'Boyle.

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