Uday Kotak-controlled Kotak Mahindra Bank is acquiring foreign-owned Indian bank ING Vysya Bank in an all-stock deal. The merger will make Kotak Mahindra the fourth largest private lender after ICICI Bank, HDFC Bank and Axis Bank.
As per the deal, Kotak Mahindra Bank will give 725 shares for every 1,000 shares of ING Vysya.
ING Vysya Bank, formerly known as Vysya Bank, is under Dutch financial services firm ING Group. ING Group owns around 43% in the publicly listed bank. The bank counts PE investors like ChrysCap, ICICI Venture, Norwest Venture Partners and PremjiInvest as shareholders.
According to Kotak Mahindra Bank, "ING Vysya merger will leverage synergy in branches, products."
"I am excited to announce the merger of Kotak Mahindra Bank and ING Vysya," Uday Kotak tweeted on the merger. "We will work towards creating shareholder value."
Total asset base of Kotak Mahindra Bank will be Rs 1,60,012 crore after the merger of ING Vysya with an asset base of Rs 64581.97 .
As a precursor, Shailendra Bhandari, managing director and CEO of ING Vysya Bank Ltd, stepped down from his role to pursue new challenges, as per a stock market disclosure. Bhandari will continue to serve in the bank till January 31, 2015.
On Thursday, shares of the two companies saw sharp gains on BSE, with Kotak rising 8% and ING Vysya soaring as much as 14%. Both stocks hit their 52-week highs and outperformed the broader markets.
Kotak Mahindra share closed 7.28% higher at Rs 1157.05 a piece, while the ING Vysya Bank was also up 7.15% at Rs 814.20 on the Bombay Stock Exchange.
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