DOMESTIC M&A: Afore XXI Banorte/Afore Bancomer

DOMESTIC M&A: Afore XXI Banorte/Afore Bancomer

Corporate & Sovereign Strategy

Grupo Financiero Banorte has been one of the main Mexican beneficiaries of European banks’ retreat from Latin America. While it might have been irrational for their global parents to part with domestic subsidiaries BBVA Bancomer or Santander Mexico, BBVA instead sought to slim down its pension operations. Its $1.73 billion sale of its Afore was the largest-ever in Mexico’s pension sector and entrenched the buyer, Banorte, as Mexico’s industry leader. Banorte teamed up with Mexico’s IMSS Social Security Institute, a co-owner of the Afore XXI Banorte pension fund, to buy Afore Bancomer. The pair paid what was judged to be 13 to 15 times the firm’s 2012 earnings. That was high — but it gave

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