Official Letter Authorizing the Merger of Grupo Financiero Banorte, S.A.B. de C.V. as the Surviving Entity and Grupo Financiero Interacciones, S.A.B. de C.V. as the Dissolved Entity

DOF: 16/08/2018

OFFICIAL LETTER authorizing the merger of Grupo Financiero Banorte, S.A.B. de C.V., as the surviving merging entity with Grupo Financiero Interacciones, S.A.B. de C.V., as the merged entity that is extinguished.

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.- Unit of Banking, Securities and Savings.- Deputy General Directorate of Banking and Securities.- Deputy General Directorate of Financial Analysis and International Linkage.- Official Letter No. UBVA/DGABV/485/2018.- UBVA/DGAAF/152/2018.

GRUPO FINANCIERO BANORTE, S.A.B. DE C.V.

Present

GRUPO FINANCIERO INTERACCIONES, S.A.B. DE C.V.

Present

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 Unit of Banking, Securities and Savings, based on the provisions of articles 31, fraction XXXIV of the Organic Law of the Federal Public Administration, 17 in relation to 19, first and last paragraphs and 20 of the Law to Regulate Financial Groups, in exercise of the powers conferred by articles 27, fraction XII and last paragraph, and 28, fraction II of the Internal Regulations of the Ministry of Finance and Public Credit and in attention to the following:

BACKGROUND

1.

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, the lawyer Héctor Martín Ávila Flores in the name and representation of "Grupo Financiero Banorte, S.A.B. de C.V."; and the lawyers Manuel Velasco Velázquez and Alejandro Frigolet Vázquez-Vela in the name and representation of "Grupo Financiero Interacciones, S.A.B. de C.V.", personality that 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 "Grupo Financiero Banorte, S.A.B. de C.V." as the merging entity that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as the merged entity that is extinguished.

B.

Based on article 20 of the Law to Regulate Financial Groups, the modification of the bylaws of "Grupo Financiero Banorte, S.A.B. de C.V.", as a consequence of the merger in question.

They add that the merger in question aims to maintain the positive trajectory of growth and profitability that "Grupo Financiero Banorte, 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)

"Grupo Financiero Interacciones, 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 "Grupo Financiero Banorte, 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 potential for cross-selling in the government segment.

d)

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

e)

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

f)

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

g)

The structure of the operation allows "Grupo Financiero Banorte, 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)

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

2.

Regarding this, the Deputy General Directorate of Banking and Securities, in exercise of the powers conferred by article 28, fraction XXII of the Internal Regulations of this Ministry and based on the provisions of articles 17, in relation to the last paragraph of 19 and 20 of the Law to Regulate Financial Groups, through official letters 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 official letters 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 inasmuch as it is responsible for supervising the general functioning of those Financial Groups.

3.

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

In relation to the merger of "Grupo Financiero Banorte, S.A.B. de C.V." as the merging entity that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as the merged entity that is extinguished:

A.

Simple copy of the public deed in which the protocolization of the Minutes of the Ordinary General Shareholders' Meeting of "Grupo Financiero Banorte, S.A.B. de C.V.", held on December 5, 2017, is recorded, through which the relevant acquisition of assets with a related party, consisting of the merger of "Grupo Financiero Banorte, S.A.B. de C.V.", in its capacity as merging society with "Grupo Financiero Interacciones, S.A.B. de C.V.", as merged society, was agreed, in accordance with the document sent through writing received on January 17, 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 "Grupo Financiero Banorte, S.A.B. de C.V.", held on December 5, 2017, is recorded, through which its merger in the capacity of merging society with "Grupo Financiero Interacciones, S.A.B. de C.V.", as merged society, was agreed, as well as the modification of Article Eight of its bylaws, derived from the aforementioned merger, in accordance with the document sent through writing received on January 17, 2018.

C.

First Testimony and four simple copies of the public deed in which the protocolization of the Minutes of the Extraordinary General Shareholders' Meeting of "Grupo Financiero Interacciones, S.A.B. de C.V.", held on December 5, 2017, is recorded, through which its merger in the capacity of merged society with "Grupo Financiero Banorte, S.A.B. de C.V.", as merging society, was agreed, in accordance with the document sent through writing received on January 17, 2018.

D.

First Testimony and four simple copies of the public deed in which the protocolization of the Merger Agreement celebrated between "Grupo Financiero Banorte, S.A.B. de C.V." as the merging society, with "Grupo Financiero Interacciones, S.A.B. de C.V.", as the merged society, is recorded, in accordance with the project sent through writing received on January 17, 2018.

E.

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 "Grupo Financiero Interacciones, S.A.B. de C.V.", in which the payment of the consideration with respect to its merger with "Grupo Financiero Banorte, S.A.B. de C.V." is agreed, is recorded, in accordance with the project sent through writing received on June 8, 2018.

F.

The financial statements on the basis of which the merger of "Grupo Financiero Banorte, S.A.B. de C.V." with "Grupo Financiero Interacciones, S.A.B. de C.V." 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 are subject to the suspensive condition consisting of obtaining the corresponding authorization from this Ministry.

4.

Through writing received in this Administrative Unit on July 5, 2018, the lawyer Héctor Martín Ávila Flores in the name and representation of "Grupo Financiero Banorte, S.A.B. de C.V." and the lawyers Manuel Velasco Velázquez and Alejandro Frigolet Vázquez-Vela in the name and representation of "Grupo Financiero Interacciones, S.A.B. de C.V.", personality that they have duly accredited before this Department, sent the following documentation:

a.

Simple copy of public deed No. 211,386 of July 4, 2018, granted before the authority of lawyer Cecilio González Márquez, Holder of Public Notary No. 151 of the City of Mexico, in which the protocolization of the Minutes of the Ordinary General Shareholders' Meeting of "Grupo Financiero Banorte, S.A.B. de C.V.", held on December 5, 2017, is recorded, through which the relevant acquisition of assets with a related party, consisting of the merger of "Grupo Financiero Banorte, S.A.B. de C.V.", in its capacity as merging society that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as merged society that is extinguished, was agreed.

b.

First Testimony and four simple copies of public deed No. 211,474 of July 4, 2018, granted before the authority of lawyer Cecilio González Márquez, Holder of Public Notary No. 151 of the City of Mexico, in which the protocolization of:

(i)

Minutes of the Extraordinary General Shareholders' Meeting of "Grupo Financiero Banorte, S.A.B. de C.V.", held on December 5, 2017, in which its merger in the capacity of merging society that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as merged society that is extinguished, was agreed, as well as the modification of Article Eight of its bylaws, derived from the aforementioned merger.

(ii)

Minutes of the Extraordinary General Shareholders' Meeting of "Grupo Financiero Interacciones, S.A.B. de C.V.", held on December 5, 2017, in which its merger in the capacity of merged society that is extinguished with "Grupo Financiero Banorte, S.A.B. de C.V.", as merging society that survives, was agreed, and

(iii)

Merger Agreement celebrated on July 4, 2018, between "Grupo Financiero Banorte, S.A.B. de C.V." as the merging society that survives, with "Grupo Financiero Interacciones, S.A.B. de C.V." as the merged society that is extinguished.

c.

First Testimony and four simple copies of public deed No. 211,473 of July 4, 2018, granted before the authority of lawyer Cecilio González Márquez, Holder of Public Notary No. 151 of the City of Mexico, in which the protocolization of the Minutes of the Ordinary and Extraordinary General Shareholders' Meeting of "Grupo Financiero Interacciones, S.A.B. de C.V.", held on July 4, 2018, is recorded, through which the payment of the consideration with respect to its merger with "Grupo Financiero Banorte, S.A.B. de C.V." was agreed.

d.

The financial statements on the basis of which the merger of "Grupo Financiero Banorte, S.A.B. de C.V." with "Grupo Financiero Interacciones, S.A.B. de C.V." 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

1.

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

2.

That the National Banking and Securities Commission through official letter No. 312-3/66354/2018 received on June 18, 2018, expressed its favorable opinion for this Ministry to authorize and approve the corporate acts in question, in terms of the proposal presented.

3.

That from an accounting-financial point of view, the merger of "Grupo Financiero Banorte, S.A.B. de C.V.", as the merging entity that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as the merged entity that is extinguished, is considered viable.

4.

That the authorization requests for the merger between "Grupo Financiero Banorte, S.A.B. de C.V.", as the merging entity that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as the merged entity that is extinguished, and the approval of the reform of the bylaws of "Grupo Financiero Banorte, S.A.B. de C.V.", referred to in Background 1 of this official letter, comply with the legal and administrative provisions applicable to the authorization procedures for two controlling societies to merge, and the approval for the modification of the bylaws of a controlling society, and

5.

That once the information and documentation presented by "Grupo Financiero Banorte, S.A.B. de C.V." and "Grupo Financiero Interacciones, S.A.B. de C.V." 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 and approval 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 Unit of Banking, Securities and Savings, issues the following:

RESOLUTION

FIRST.-

The merger of "Grupo Financiero Banorte, S.A.B. de C.V.", as the merging entity that survives with "Grupo Financiero Interacciones, S.A.B. de C.V.", as the merged entity that is extinguished, is authorized, in the terms agreed by both societies in their respective Extraordinary General Shareholders' Meetings held on December 5, 2017, whose minutes were protocolized through public deed number 211,474 of July 4, 2018, granted before the authority of lawyer Cecilio González Márquez, Holder of Public Notary No. 151 of the City of Mexico, and in terms of the respective merger agreement celebrated on July 4, 2018, protocolized in the aforementioned public deed.

This authorization is subject to the resolutive condition consisting of not sending 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 twenty business days following the date on which this official letter 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 Society regarding the merger are recorded, are registered in the corresponding Public Commerce Registry, in accordance with the provisions of the first paragraph of article 19 of the Law to Regulate Financial Groups, and must inform this Ministry about the date and other data related to the aforementioned registrations within a period of ten business days counted from the date on which these are 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 the provisions of the second paragraph of article 19 of the Law to Regulate Financial Groups, at the expense of "Grupo Financiero Banorte, S.A.B. de C.V.".

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

FOURTH.-

As a consequence of the merger, "Grupo Financiero Banorte, S.A.B. de C.V." will result as universal successor to "Grupo Financiero Interacciones, S.A.B. de C.V.", 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 enumerative but not limiting manner, all obligations of the merged entity.

FIFTH.-

With respect to the authorization for "Grupo Financiero Banorte, S.A.B. de C.V." to merge "Grupo Financiero Interacciones, S.A.B. de C.V.", referred to in the First Resolutive of this official letter, the authorization granted to "Grupo Financiero Interacciones, S.A.B. de C.V." to organize as a controlling society and for the constitution and functioning of the respective financial group, will be rendered void by operation of law, in accordance with article 17, last paragraph, of the Law to Regulate Financial Groups.

SIXTH.-

The modification of Article Eight of the bylaws of "Grupo Financiero Banorte, S.A.B. de C.V." is approved, in the terms agreed by its Extraordinary General Shareholders' Meeting held on December 5, 2017, protocolized through public deed number 211,474 of July 4, 2018, granted before the authority of lawyer Cecilio González Márquez, Holder of Public Notary No. 151 of the City of Mexico.

Finally, the First Testimonies of Public Deeds 211,474 and 211,473 that they attached to their writing are returned to "Grupo Financiero Banorte, S.A.B. de C.V." and "Grupo Financiero Interacciones, S.A.B. de C.V.", 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 such inscriptions are verified.

This authorization and approval are issued based on the information and documentation provided by "Grupo Financiero Banorte, S.A.B. de C.V." and "Grupo Financiero Interacciones, S.A.B. de C.V.", and are limited exclusively to the acts and operations that, in accordance with the applicable provisions, it is the responsibility of this Unit of Banking, Securities and Savings to resolve and do not prejudge the carrying out of any corporate act that said Societies carry out, which imply the prior authorization or approval of the financial, tax or any other authorities, in terms of the current regulations.

Without any other particular matter, I take this opportunity to send you a cordial greeting.

Respectfully

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

(R.- 471874)

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