MUMBAI: In a move that could rev up consolidation in the banking sector, the board of private lender Kotak Mahindra Bank on Thursday approved the acquisition of rival ING Vysya Bank in an all-stock deal. Dutch lender ING Groep NV owns roughly a 43 percent stake in ING Vysya, and will become the second-largest shareholder in Kotak Mahindra with about a 7 percent stake after the takeover.
The combined banking entity will have 1,214 branches with a widespread network across the country, the two banks said in a statement, adding it would also explore international business. Also, Kotak Mahindra Bank, which has largely been an urban retail loan platform, will get access to ING Vysya’s small and medium enterprise business.
The share swap ratio announced indicates a price of Rs 790 for each ING Vysya share based on average closing price this month, which would peg the deal at just over Rs 15,000 crore. ING Vysya shares closed 7.15 per cent higher on the BSE ahead of the announcement which came after trading hours. Kotak too jumped by 7.28 per cent to close at Rs 1,157.05 per unit on the BSE. This is the first amalgamation of a profit earning entity post global financial meltdown in 2008. The deal now awaits regulatory approvals.
