Citigroup Tightens Grip on Central America
December 13, 2006
Citigroup is attempting to strengthen its hold in Central America by purchasing one of the leading financial groups in the region.
The company announced Wednesday its deal to purchase the subsidiaries of Grupo Cuscatlan from Corporacion UBC Internacional for $1.51 billion in cash and stock. The transaction, which is subject to regulatory approval, is anticipated to close in early 2007.
Citigroup will acquire Grupo Cuscatlan's banking and financial intermediaries, including pension and insurance operations in El Salvador. The group also offers services in Honduras, Panama, Guatemala and Costa Rica. It's the second Central America purchase Citibank has made in a six-week span. On Oct. 27, the company acquired Grupo Financiero Uno, the largest issuer of credit cards in the region, but terms of the deal were not disclosed. GFU claimed nearly $2.1 billion in assets.
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In its largest foray south of the border, Citigroup bought Mexico's Grupo Financiero Banamex in 2001. Two years earlier it bought Financiero Atlas, the No. 2 consumer finance company in Chile, and the year after that it raises its stake Argentinean retirement-services group Grupo Siembra to 100 percent and in Mexican pension-fund manager Afore Garante to 91 percent.
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