MUMBAI: In India's biggest banking merger, Kotak Mahindra Bank on Thursday announced the acquisition of mid-sized private sector ING Vysya Bank in an all-share deal worth Rs 15,000 crore.
The merger will catapult the nation's fourth largest private bank to nearly Rs 2 lakh crore balancesheet size ahead of the entry of new players next year.
In the all-share deal, 725 equity shares of Rs 5 each (face value) of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Post merger, Dutch lender ING Group NV which currently holds 42.73 per cent stake in ING Vysya Bank, will become the second largest shareholder in Kotak Mahindra Bank at 6.5 per cent.
Holding of Uday Kotak in the merged entity will also be diluted to 34 per cent from 39.71 per cent. The deal will help him to comply with RBI directive of bringing his stake down to 30 per cent by end of 2016.
The combined banking entity will have a network of 1,214 branches across the country.
Announcing the deal, Uday Kotak, vice chairman and managing director, Kotak Mahindra Bank said, the deal is expected to close by April 1 after it gets all statutory approvals, including from RBI and Competition Commission of India.
The share swap ratio announced indicates a price of Rs 790 for each ING Vysya Bank share based on average closing price this month, valuing the deal at just over Rs 15,000 crore.
ING Vysya Bank shares closed 7.15 per cent at Rs 814.20 per on the BSE ahead of the announcement which came after trading hours. Kotak Mahindra Bank too jumped by 7.28 per cent to close at Rs 1,157.05 per unit at the BSE.
This is the first amalgamation of a profit earning entity post global financial meltdown in 2008. Although two more mergers took place during this period but those were amalgamations under different circumstances.
The merger will catapult the nation's fourth largest private bank to nearly Rs 2 lakh crore balancesheet size ahead of the entry of new players next year.
In the all-share deal, 725 equity shares of Rs 5 each (face value) of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Post merger, Dutch lender ING Group NV which currently holds 42.73 per cent stake in ING Vysya Bank, will become the second largest shareholder in Kotak Mahindra Bank at 6.5 per cent.
Holding of Uday Kotak in the merged entity will also be diluted to 34 per cent from 39.71 per cent. The deal will help him to comply with RBI directive of bringing his stake down to 30 per cent by end of 2016.
The combined banking entity will have a network of 1,214 branches across the country.
Announcing the deal, Uday Kotak, vice chairman and managing director, Kotak Mahindra Bank said, the deal is expected to close by April 1 after it gets all statutory approvals, including from RBI and Competition Commission of India.
The share swap ratio announced indicates a price of Rs 790 for each ING Vysya Bank share based on average closing price this month, valuing the deal at just over Rs 15,000 crore.
ING Vysya Bank shares closed 7.15 per cent at Rs 814.20 per on the BSE ahead of the announcement which came after trading hours. Kotak Mahindra Bank too jumped by 7.28 per cent to close at Rs 1,157.05 per unit at the BSE.
This is the first amalgamation of a profit earning entity post global financial meltdown in 2008. Although two more mergers took place during this period but those were amalgamations under different circumstances.
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