BlackRock and Citibanamex, a subsidiary of Citigroup have announced a definitive agreement for BlackRock to acquire the asset management business of Citibanamex, subject to regulatory approvals and customary closing conditions.
BlackRock and Citibanamex will also enter into a distribution agreement upon the closing of the transaction, to offer BlackRock asset management products to Citibanamex clients in Mexico. Through its network of 1,500 branches in Mexico, Citibanamex provides wealth management products and services to more than 20 million clients.
The transaction involves approximately US$31 billion in assets under management of Citibanamex, across local fixed income, equity and multi-asset products, primarily for retail clients. The transaction is part of Citi’s emphasis on expanding access to best-in-class investments products, rather than on manufacturing proprietary asset management products. BlackRock’s business in Mexico currently focuses mostly on institutional clients, offering international investment and risk management products and services across asset classes, strategies and geographies.
The agreement builds upon the long-standing relationship between BlackRock and Citi and brings together two leading firms to offer a wider range of products, enhanced technology and investment capabilities for clients. It is expected to close during the second half of 2018. The financial impact of the transaction is not expected to be material to Citigroup or BlackRock earnings. Terms were not disclosed.
Armando Senra, Head of Latin America and Iberia for BlackRock, said: “BlackRock’s ambition is to become a full solutions provider in key markets around the world. This transaction is a big step forward in that direction in Mexico. The acquisition of Citibanamex’s asset management capabilities combined with our global investment platform and technology create a stronger franchise that can deliver a more compelling set of investment solutions across client segments in Mexico.”
Jane Fraser, CEO of Latin America for Citi, said: “Our goal is to create a state-of-the-art bank in Mexico focused on delivering a richer, smarter, more intuitive experience to everyone who does business with Citibanamex. The agreement with BlackRock delivers on our commitment, offering clients leading asset management services, and provides BlackRock with access to our extensive network in Mexico. We are excited by the opportunities this transaction offers and look forward to working with BlackRock.”
Mark McCombe, Head of the Americas region for BlackRock, said: “BlackRock believes in the long-term growth potential of Mexico and is committed to continue growing our presence here. Combining BlackRock’s capabilities in product and technology with the distribution network of Citibanamex creates a stronger franchise that can do more for clients.”
Ernesto Torres Cantu, CEO of Citibanamex, said: “Our commitment is to deliver the best client experience by offering the best of Mexico, and bringing to them the best of the world. Our association with BlackRock does exactly that”.
Citi Institutional Clients Group advised Citi on this transaction.