ING Vysya Bank to merge with Kotak Mahindra Bank
Amsterdam, 20 November 2014
ING Vysya Bank (Vysya) and Kotak Mahindra Bank (Kotak) today announced (PDF) their intention to merge their respective businesses. The combination of their businesses will lead to a strengthened position as one of India’s leading privately held banks, with a wider geographical spread and enhanced expertise across customer segments and product categories.
With a current shareholding of 42.7%, ING is the largest shareholder in Vysya. ING has indicated its support for the proposed transaction to Vysya and Kotak. In line with ING´s Think Forward strategy, the merger of Vysya with Kotak will give ING a stake in a stronger bank with an excellent long-term potential for sustainable profitable growth. ING and Kotak also intend to explore areas of cooperation in cross border business.
In the proposed transaction, Vysya will be merged into Kotak. Shareholders of Vysya will receive 0.725 shares in Kotak for each Vysya share. Upon completion of the merger, ING would hold a stake of approximately 7% in the combined company, which will operate under the Kotak brand. ING’s holding in the combined company will be subject to a 1 year lock-up period from the closing of the transaction.
Based on Kotak’s one month average share price at closing to 19 November 2014, the exchange ratio represents a premium of 16% over the one month average share price of Vysya to 19 November 2014. Based on Vysya’s book value as per 30 September 2014, the proposed transaction is estimated to result in a pro-forma net profit for ING of approximately EUR 150 million to be booked at closing, and a limited positive impact on ING Bank’s common equity Tier 1 ratio.
The proposed transaction is subject to customary regulatory approvals and to approval of the shareholders of Kotak and Vysya. The transaction is expected to close in the second half of 2015.
About ING Vysya Bank
ING Vysya Bank is a Bangalore based bank offering retail, private and wholesale banking products to its more than two million customers. Established over 80 years ago, Vysya’s pan-Indian network spans around 573 branches. The bank has around 10,000 employees and shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India (INGVYSYABK). In 1999 ING Bank’s predecessor Bank Bruxelles Lambert acquired an equity stake in Vysya bank which ING increased to around the current level in 2002. ING in 2002 also formed an Insurance joint-venture with Vysya, in which ING sold its interest in 2013.
About Kotak Mahindra Bank
Kotak Mahindra Bank is part of the Kotak Mahindra Group, one of India’s leading financial services conglomerates, founded in 1985. With 22,000 employees, the bank has a distribution network of 652 branches across India and international offices in London, New York, Dubai, Abu Dhabi, Mauritius and Singapore. Kotak offers wealth management and personal finance solutions, transaction banking and lending and advice to corporates and financial institutions. Kotak shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India (KOTAKBANK).
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