The merger will come into effect from April 1, 2015.
In February 2015, the proposed Rs 15,000-crore merger deal between Kotak Mahindra Bank and ING Vysya Bank got the Competition Commission of India (CCI)’s approval.
According to the fair trade regulator, the merger, which would create the country’s fourth largest private sector lender, is “not likely to have an appreciable adverse effect on competition in India”.
In November 2014, Kotak had announced that it was acquiring Bengaluru-headquartered ING Vysya Bank in an all-stock deal. The deal will make Kotak the fourth-largest private bank in the country in terms of total business.
The biggest three banks are ICICI Bank, HDFC Bank and Axis Bank, in that order.
The combined banking entity will have a widespread network of 1,214 branches across the country.
The deal implies a price of Rs 790 for each ING Vysya share, based on the average closing price of Kotak shares during the month to November 19, valuing the deal at around Rs 15,000 crore. That was a 16% premium to a like measure of ING Vysya market price, Kotak Bank said in a media statement. The proposed merger would result in issuance of around 15.2% of the equity share capital of the merged Kotak bank.
With ING Vysya nearing the foreign shareholding cap of 74%, this merger would yield more liquidity and significant headroom for foreign money, as the foreign shareholding after the merger would be 47%, the press statement said. The promoters hold a 42% stake in ING Vysya Bank.
After the merger, the ING group, with a 6.4% stake, will become the second-largest shareholder in the bank. According to regulations, RBI’s approval is required for an entity other than the promoter to have more than 5% stake in a bank.