Kotak Mahindra Bank Buys ING Group Share Deal

Kotak Mahindra Bank on Thursday announced that it has acquired Bangalore-based ING Bank Vysya all-stock deal. ING shareholders will receive 725 shares of Kotak Bank 1000 shares they own.

kotak mahindra bank logo

The deal will make Kotak fourth largest private bank in the country with a general business perspective. The largest three banks ICICI Bank, HDFC Bank and Axis Bank, in that order. Joint bank structure will have a wide network of 1214 branches across the country.

The transaction implies a price Rs 790 per share ING Vysya, based on the average closing price of shares of Kotak months to November 19 assessment of the transaction of around Rs 15,000 crore. It was a hundred premium 16 as a measure of the market price of ING Vysya, Kotak Bank said in a media statement. The proposed merger will result in the issuance of approximately 15.2 per cent of the equity share capital of the joint Kotak.

The deal will need regulatory approval, including from the Central Bank of India and the Competition Commission of India. Managing banks is expected, the new company will start operating from April 1, 2015.

ING Vysya CEO Uday Sareen nominees will be entered in the top management of Kotak; who works in the committee on management, reporting directly to Kotak Mahindra Bank Executive Vice-President and Managing Director Uday Kotak. All ING branches and employees will become Kotak branches and employees.

With ING Vysya approaching foreign investment cap is 74 percent, the merger will not lead to an increase in liquidity and a considerable height for foreign money as foreign equity after the merger is 47 percent, according to a press statement. The organizers have a stake in 42 per cent of ING Vysya Bank.

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