May 18, 2001,

Friday Citigroup to Buy Mexican Bank In a Deal Valued at $12.5 Billion

By RIVA D. ATLAS and TIM WEINER

Source: The New York Times Section: Business/Financial Desk 1446 words

Abstract:

Citigroup to buy Mexico's second-largest bank, Grupo Financiero Banamex-Accival, for $12.5 billion in cash and stock; purchase demonstrates Citigroup's faith in recovery of Mexico's economy and banking system since financial crisis of 1994; Citigroup officials say there is tremendous lending potential in Mexico, and they also hope to use company's Banamex brand name to serve fast-growing Hispanic population in United States; Citigroup's vice chairman, Robert E Rubin, engineered $20 billion bailout of Mexican financial system when he was United States Treasury secretary in Clinton administration, and helped put latest deal together; after Banamex purchase, three biggest banks in Mexico, representing two-thirds of nation's bank deposits, will be controlled by foreign institutions; analysts praise Citigroup deal;

Lead Paragraph:

In the biggest Latin American acquisition by a United States company, Citigroup announced yesterday that it would buy Mexico's second-largest bank for $12.5 billion in cash and stock. The purchase of Grupo Financiero Banamex-Accival demonstrates Citi...