MEXICO CITY (Reuters) - Grupo Financiero Banorte SAB de CV (Banorte), which runs one of Mexico's biggest financial groups, said on Tuesday it has reached a deal to buy a local pension fund owned by Spain's Banco Bilbao Vizcaya Argentaria S.A. (BBVA) in a deal valued at $1.6 billion.
The cost of the acquisition of the Bancomer pension fund will be split in half between Banorte (GFNORTEO.MX) and the Mexican Social Security Institute, a state-run health organization. The two co-own the Afore XXI Banorte pension fund in Mexico.
Earlier this year, Banorte's chairman and former head of Mexico's central bank, Guillermo Ortiz, told Reuters that the group was also looking at BBVA's (BBVA.MC) pension funds in Colombia and Peru.
Banorte, Mexico's No.4 bank by assets, has been actively strengthening its operations in the country. Last year, the group bought boutique bank Ixe, which gave it access to Ixe's portfolio of wealthy clients.
The group's chairman emeritus, Roberto Gonzalez Barrera, 81, died in August from complications related to pancreatic cancer. The bank said his heirs remain major shareholders after his passing.
Banorte shares ended up 0.14 percent at 74.11 pesos on Tuesday.
The country's pension regulator said on Tuesday evening that the firms had started the paperwork necessary for approval, but pointed out that the deal still needed approval from multiple government regulatory agencies.
"This commission has the resources necessary to issue a speedy ruling on this transaction," the regulator said.
(Reporting By Alexandra Alper and Cyntia Barrera; Editing by Tim Dobbyn and Matt Driskill)