Office Order Authorizing the Merger of Banco Mercantil del Norte, S.A. with Banco Interacciones, S.A.

DOF: 16/08/2018

OFFICE ORDER authorizing the merger of Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group, as the surviving merging society with Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group as the extinguished merged society.

At the margin, a seal with the National Coat of Arms, which says: United Mexican States.- Ministry of Finance and Public Credit.- Undersecretariat of Finance and Public Credit.- Banking, Securities and Savings Unit.- Deputy General Directorate of Banking and Securities.- Deputy General Directorate of Financial Analysis and International Linkage.- Office No. UBVA/DGABV/487/2018.- UBVA/DGAAF/153/2018.

BANCO MERCANTIL DEL NORTE, S.A., MULTIPLE BANKING INSTITUTION, BANORTE FINANCIAL GROUP

Presente

BANCO INTERACCIONES, S.A., MULTIPLE BANKING INSTITUTION, INTERACCIONES FINANCIAL GROUP

Presente

This Ministry of Finance and Public Credit, through the Deputy General Directorates of Banking and Securities and of Financial Analysis and International Linkage, attached to the Banking, Securities and Savings Unit, based on what is established in articles 31, fraction XXXIV of the Organic Law of the Federal Public Administration, 17 in relation to 19, first and last paragraphs, of the Law to Regulate Financial Groups, in exercise of the attributes conferred by article 27, fraction XII and last paragraph, of the Internal Regulations of the Ministry of Finance and Public Credit and in attention to the following:

BACKGROUND

Through writings received in this Administrative Unit on January 17, February 14, March 14 and 22, April 4 and 17, May 11, 15, 16, 25 and 30 and June 4 and 8, all of 2018, Licentiate Héctor Martín Ávila Flores in the name and representation of "Banorte Financial Group, S.A.B. de C.V." and "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", and Licentiates Manuel Velasco Velázquez, Alejandro Frigolet Vázquez-Vela and Roberto Fernández Valderrama, in the name and representation of "Interacciones Financial Group, S.A.B. de C.V." and "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", personality which they have duly accredited before this Department, requested authorization from this Ministry to carry out, among others, the following legal acts:

A.

Based on article 17 of the Law to Regulate Financial Groups, the merger of "Banorte Financial Group, S.A.B. de C.V." as the surviving merging society with "Interacciones Financial Group, S.A.B. de C.V.", as the extinguished merged society.

B.

As a result of the above and in accordance with what is established by article 17 in relation to the last paragraph of 19, of the Law to Regulate Financial Groups, the merger, among others, of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" as the surviving merging society with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the extinguished merged society.

They add that the corporate acts in question aim to maintain the positive trajectory of growth and profitability that "Banorte Financial Group, S.A.B. de C.V." has been building to position itself as a leading financial institution in Mexico.

Likewise, they state that the reasons for carrying out the proposed transaction are based on the following:

a)

"Interacciones Financial Group, S.A.B. de C.V." has executed a successful strategy that has allowed it to obtain sustainable and profitable growth.

b)

Great opportunity to increase the participation of "Banorte Financial Group, S.A.B. de C.V." in the infrastructure sector, which has proven to be highly profitable with significant growth potential.

c)

High complementarity and significant cross-selling potential in the government segment.

d)

Transaction with low relative execution risk and high degree of expected synergies.

e)

Favorable relative value relationship of "Banorte Financial Group, S.A.B. de C.V." compared to "Interacciones Financial Group, S.A.B. de C.V."

f)

The operation could result in a significant increase in earnings per share of "Banorte Financial Group, S.A.B. de C.V."

g)

The structure of the operation allows "Banorte Financial Group, S.A.B. de C.V." to maintain high capital levels to continue its profitable and sustainable growth and at the same time evaluate other inorganic opportunities in the near future.

h)

"Banorte Financial Group, S.A.B. de C.V." consolidates its competitive position, becoming the second largest financial group in Mexico.

Regarding this, the Deputy General Directorate of Banking and Securities, in exercise of the attributes conferred by article 28, fraction XXII of the Internal Regulations of this Ministry and based on what is established by article 17, in relation to the last paragraph of 19 of the Law to Regulate Financial Groups, through offices UBVA/DGABV/028/2018, UBVA/DGABV/094/2018, UBVA/DGABV/169/2018, UBVA/DGABV/189/2018, UBVA/DGABV/206/2018, UBVA/DGABV/240/ 2018, UBVA/DGABV/289/2018, UBVA/DGABV/347/2018, UBVA/DGABV/351/2018, UBVA/DGABV/ 374/2018, UBVA/DGABV/383/2018, UBVA/DGABV/394/2018 and UBVA/DGABV/409/2018, of January 18, February 15, March 16 and 23, April 5 and 18, May 15, 16, 17, 25 and 30, June 4 and 8, all of 2018, respectively, requested the opinion of the Bank of Mexico.

Likewise, through offices UBVA/DGABV/029/2018, UBVA/DGABV/095/2018, UBVA/DGABV/170/ 2018, UBVA/DGABV/190/2018, UBVA/DGABV/207/2018, UBVA/DGABV/241/2018, UBVA/DGABV/ 290/2018, UBVA/DGABV/348/2018, UBVA/DGABV/352/2018, UBVA/DGABV/375/2018, UBVA/ DGABV/384/2018, UBVA/DGABV/395/2018 and UBVA/DGABV/410/2018, of January 18, February 15, March 16 and 23, April 5 and 18, May 15, 16, 17, 25 and 30, June 4 and 8, all of 2018, respectively, the opinion of the National Banking and Securities Commission was requested in virtue of being responsible for supervising and regulating, among other financial entities, the multiple banking institutions.

Through office UBVA/DGABV/440/2018 of June 18, 2018, this Administrative Unit through the Deputy General Directorate of Banking and Securities, communicated to "Banorte Financial Group, S.A.B. de C.V." and "Interacciones Financial Group, S.A.B. de C.V.", that in order to be able to resolve what is appropriate, it should remit within the twenty business days following the date of its verification, in terms of the presentation made, among others, the following:

In relation to the merger of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" as the surviving merging society with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the extinguished merged society:

A.

First Testimony and four simple copies of the public deed in which the protocolization of the Minutes of the Extraordinary General Shareholders' Meeting of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" is recorded, in which, among others, its merger as a merging society with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the merged society, is agreed, in accordance with the project sent through writing received on June 4, 2018.

B.

First Testimony and four simple copies of the public deed in which the protocolization of the Minutes of the Extraordinary General Shareholders' Meeting of "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" is recorded, in which its merger as a merged society with "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", as the merging society, is agreed, in accordance with the project sent through writing received on June 4, 2018.

C.

First Testimony and four simple copies of the public deed in which the protocolization of the Merger Agreement celebrated between "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" as the merging society, with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the merged society, is recorded, in accordance with the project sent through writing received on June 8, 2018.

D.

First Testimony and four simple copies of the public deed in which the protocolization of the Minutes of the Ordinary and Extraordinary General Shareholders' Meeting of "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" is recorded, in which the payment of the consideration with respect to the merger of "Banorte Financial Group, S.A.B. de C.V." with "Interacciones Financial Group, S.A.B. de C.V." is agreed, in accordance with the project sent through writing received on June 8, 2018.

E.

The financial statements on the basis of which the merger of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" will be carried out, as well as the pro forma financial statements of the merging society, in which effect is given to the merger.

The above, with the understanding that the agreements of the corporate acts in question must be subject to the suspensive condition consisting of obtaining the corresponding authorization from this Ministry.

Through writing received in this Administrative Unit on July 5, 2018, Licentiate Héctor Martín Ávila Flores in the name and representation of "Banorte Financial Group, S.A.B. de C.V." and "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", and Licentiates Manuel Velasco Velázquez and Alejandro Frigolet Vázquez-Vela, in the name and representation of "Interacciones Financial Group, S.A.B. de C.V." and "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", personality which they have duly accredited before this Department, remitted the following documentation:

a.

First Testimony and four simple copies of public deed No. 211,475 of July 4, 2018, granted before the faith of Licentiate Cecilio González Márquez, Holder of Public Notary No. 151 of Mexico City, in which the protocolization of:

(i)

Minutes of the Extraordinary General Shareholders' Meeting of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", held on July 4, 2018, through which, among others, its merger as a merging society that survives with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the extinguished merged society, was agreed.

(ii)

Minutes of the Extraordinary General Shareholders' Meeting of "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", held on July 4, 2018, through which its merger as a merged society that is extinguished with "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", as the merging society that survives, was agreed, and

(iii)

Merger Agreement celebrated on July 4, 2018 between "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" as the merging society that survives with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" as the extinguished merged society.

b.

First Testimony and four simple copies of public deed No. 211,471 of July 4, 2018, granted before the faith of Licentiate Cecilio González Márquez, Holder of Notary No. 151 of Mexico City, in which the protocolization of the Minutes of the Ordinary and Extraordinary General Shareholders' Meeting of "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", held on July 4, 2018, is recorded, through which the payment of the consideration with respect to the merger of "Banorte Financial Group, S.A.B. de C.V." with "Interacciones Financial Group, S.A.B. de C.V." was agreed.

c.

The financial statements on the basis of which the merger of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" will be carried out, as well as the pro forma financial statements of the merging society, in which effect is given to the merger.

CONSIDERING

That the Bank of Mexico through office OFI002-1802028 received on June 15, 2018, expressed its favorable opinion in order for this Ministry to authorize what was requested by the promoters.

That the National Banking and Securities Commission through office No. 312-3/66354/2018 received on June 18, 2018, expressed its favorable opinion for this Ministry to authorize the merger in question, in terms of the presentation made.

That from an accounting-financial point of view, the merger of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", as the surviving merging society with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the extinguished merged society, is considered viable.

That on this same date, this Ministry authorized the merger of "Banorte Financial Group, S.A.B. de C.V.", as the surviving merging society, with "Interacciones Financial Group, S.A.B. de C.V.", as the extinguished merged society, which must take effect in terms of what is established by the first paragraph of article 19 of the Law to Regulate Financial Groups.

That the request for authorization for the merger between "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" as the surviving merging society with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" as the extinguished merged society, referred to in Background 1 of this office, complies with the legal and administrative provisions applicable to the authorization procedure for two financial entities belonging to the same Financial Group to merge, and

That once the information and documentation presented by "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" and "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" has been analyzed, and after hearing the opinions of the Bank of Mexico and the National Banking and Securities Commission, as well as having determined the appropriateness of granting the authorization in question, this Ministry of Finance and Public Credit through the Deputy General Directorates of Banking and Securities and of Financial Analysis and International Linkage attached to the Banking, Securities and Savings Unit, issues the following:

RESOLUTION

FIRST.-

The merger of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", as the surviving merging society with "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", as the extinguished merged society, is authorized, in the terms agreed by both societies in their respective Extraordinary General Shareholders' Meetings held on July 4, 2018, whose minutes were protocolized through public deed number 211,475 of July 4, 2018, granted before the faith of Licentiate Cecilio González Márquez, Holder of Public Notary No. 151 of Mexico City, and in terms of the respective merger agreement celebrated on July 4, 2018, protocolized through the referenced public deed.

This authorization is subject to the resolutive condition consisting of not remitting to this Ministry, the records of entry of the public deeds in which the merger in question has been agreed in the respective Public Commerce Registry, within the twenty business days following the date on which this office is notified.

SECOND.-

The authorized merger will take effect from the date on which this authorization and the public instruments in which the Shareholders' Meeting agreements of each Institution regarding the merger are recorded, are registered in the corresponding Public Commerce Registry, in accordance with what is established by the first paragraph of article 19 of the Law to Regulate Financial Groups, informing this Ministry about the date and other data related to said registrations within a period of ten business days counted from the date on which they have been verified.

THIRD.-

This authorization as well as the merger agreements adopted by the respective Shareholders' Meetings must be published in the Official Journal of the Federation in terms of what is established by the second paragraph of article 19 of the Law to Regulate Financial Groups, at the cost of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group".

The carrying out of said publications must be notified to this Administrative Unit, attaching a copy of the documentation that accredits it, within the five business days following the date on which said publications are verified.

FOURTH.-

As a consequence of the merger, "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" will result as universal successor to "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", and all assets and liabilities of the latter will be incorporated into it, without reservation or limitation of any kind and without the need for any complementary legal act, including in an enunciative but not limiting manner, all obligations of the merged entity.

In this sense, the participations in the social capital of the societies "Inmobiliaria Mobinter, S.A. de C.V.", "Inmobiliaria Interorbe, S.A. de C.V.", "Inmobiliaria Interdiseño, S.A. de C.V." and "Estrategia en Finanzas & Infraestructura, S.A. de C.V.", owned by "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", will become the property of "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group", as the merging society, for which it must have the corresponding authorization of the National Banking and Securities Commission.

FIFTH.-

With respect to the authorization for "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" to merge "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", referred to in Resolutive First of this office, the authorization granted to "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group" to organize and operate as a multiple banking institution, will become void by operation of law, in accordance with article 17, last paragraph, of the Law to Regulate Financial Groups.

Finally, the First Testimonies of Public Deeds No. 211,475 and 211,471 that they attached to their writing are returned to "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" and "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", with the indication that they must inform this Department about the date and other data related to the inscription they carry out of the same before the respective Public Commerce Registry, within a period of ten business days counted from the date on which said inscriptions are verified.

This authorization is issued based on the information and documentation provided by "Banco Mercantil del Norte, S.A., Multiple Banking Institution, Banorte Financial Group" and "Banco Interacciones, S.A., Multiple Banking Institution, Interacciones Financial Group", and is limited exclusively to the acts and operations that, in accordance with the applicable provisions, it is competent for this Banking, Securities and Savings Unit to resolve and does not prejudge the carrying out of any corporate act that said Institutions carry out, which imply prior authorization or approval of the financial, tax or any other authorities, in terms of the current regulations.

Without further particular, I take the opportunity to send you a cordial greeting.

Sincerely

Mexico City, July 9, 2018. - The Deputy General Director of Banking and Securities, Ana Laura Villanueva Vega.- Rubric.- The Deputy General Director of Financial Analysis and International Linkage, Raúl Alejandro Rosales Guadarrama.- Rubric.

(R.- 471876)

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