Mexico's Banorte has formalized its acquisition of US insurance company Prudential's (NYSE: PRU) shares in Mexican pension fund administrator Afore XXI, according to the latter's parent company, Instituto Mexicano del Seguro Social (IMSS).
Prudential's shares in Afore XXI represent 50% of the pension fund administrators' share capital. IMSS has also completed acquiring 50% of shares in Banorte pension fund administrator Afore Banorte, according to the IMSS release.
IMSS general director Karam Toumeh said consumers would benefit from the merger, as commission charges by Afore XXI and Afore Banorte would decrease to 1.33% from January 2012.
The merger will make the new company, Afore XXI Banorte, the largest pension provider in Mexico in terms of customers, with 6.9mn accounts.
The Banorte financial group also includes the country's third largest bank and several other subsidiaries.