01 — The Transaction
The transaction.
All-stock merger of Ixe Grupo Financiero into Grupo Financiero Banorte, creating the third-largest bank in Mexico. Estimated annual pre-tax synergies of US$80 to 115 million, with a capitalization ratio of 16.8%.
Jun 2010
Origination
Idea presented to Banorte
Sep 2010
Talks
Preliminary talks with Ixe
Oct 2010
Diligence
Non-binding agreement
Nov 2010
Signing
Binding agreement, November 16
1Q 2011
Closing
Regulatory approval
Context
Scale in a consolidating market
Banorte was looking for scale in a consolidating banking market. Ixe was a strategic, highly complementary asset, but not for sale.
01
Execution
Originated, valued, kept on track
The idea of a transaction with Ixe was originated and presented to Banorte. The work mapped the strengths and weaknesses of Ixe against Banorte's own, and set a fair valuation range designed to maximize the probability of completion. The analysis of revenue, cost and funding synergies showed a transaction that would be close to self-financing. Through due diligence, the transaction was kept on an objective footing internally and externally, and the process stayed on track after information leaked during the preliminary negotiations.
02
Outcome
Third-largest bank in Mexico
The merger was the most significant consolidation in Mexican banking of its decade and created the third-largest bank in the country, with a capitalization ratio of 16.8%. In July 2011, Euromoney and World Finance each named the combined institution the best bank in Mexico.
03
The standard was set at scale. It is applied every week.
