Banorte to Buy Mexico’s Ixe Grupo for $1.31 Billion

Grupo Financiero Banorte SAB, Mexico’s third-largest lender, agreed to buy Ixe Grupo Financiero SAB for 16.2 billion pesos ($1.31 billion) to expand in the nation’s capital and gain wealthier customers.

Banorte, based in Monterrey, will issue 308 million new shares and exchange 0.389 of its own shares for each Ixe share, Banorte said in an e-mailed statement. Alejandro Valenzuela, Banorte’s chief executive officer, said on Nov. 10 that today would be the deadline for reaching an agreement. Banorte shares lost 0.9 percent to 53.33 pesos in Mexico City trading at 11:25 a.m. New York time today. Ixe added 1 percent to 19.79 pesos.

The deal solidifies Banorte’s position as Mexico’s number three lender behind the local units of Banco Bilbao Vizcaya Argentaria SA and Citigroup Inc., said Mario Pierry, an analyst at Deutsche Bank AG who covers Latin America’s financial industry. Banorte had 238 billion pesos in outstanding loans at the end of September, compared with 28.7 billion pesos for Mexico City-based Ixe, according to the National Banking and Securities Commission, or CNBV.

“It definitely strengthens Banorte’s position in Mexico,” Pierry said in a telephone interview last week, before the deal was announced. “It becomes the third-largest bank in terms of assets, deposits, branches, so it definitely improves Banorte quite a bit.”

‘Premium Bank’

Banorte has used takeovers, including Bancrecer SA, to grow into a national financial group from a north-Mexican regional lender since the country’s banking industry collapse in 1995. The Ixe purchase will probably close in the first quarter, and the combined banks will be called Grupo Financiero Banorte-Ixe, Banorte said.

Banorte was interested in acquiring Ixe for its wealthier clientele and brokerage services, including underwriting and managing investment portfolios, Valenzuela said in an Oct. 27 conference call.

“Ixe is a premium bank, it’s a bank that’s well consolidated in certain sectors of the market Banorte still isn’t present,” he said. “The synergies are clearly very important.”

To contact the reporters on this story: Thomas Black in Monterrey at tblack@bloomberg.net; Jonathan Roeder in Mexico City at jroeder@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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