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The merger between Kotak Mahindra Bank and ING Vysya Bank has received the approval of shareholders of both.
Shareholders of the Mumbai-based Kotak bank approved the merger proposal at an extraordinary general meeting in Mumbai on Wednesday. The exchange ratio has been fixed at 725 Kotak shares with 1, 000 ING Vysya shares.
ING Vysya Bank’s shareholders, too, had approved the merger proposal on Wednesday.
The share of both the banks closed five per cent higher on the BSE. The ING stock was up 5.4 per cent at Rs 925, while that of Kotak rose 5.5 per cent at Rs 1,340.
The top management of both banks had made the merger announcement on November 20, 2014. The deal will make Kotak Mahindra the fourth-largest private bank in India, in terms of total business after ICICI Bank, HDFC Bank and Axis Bank. The combined banking entity will have 1,214 branches in India. The merger needs regulatory approvals, including from the Reserve Bank of India (RBI) and the Competition Commission of India. The management of the banks expect the new entity to be operational by April 1, 2015.
The deal will also help Kotak group chairman, Uday Kotak reduce promoters’ stake in the bank, in line with the road map given by RBI.
After the merger, promoters’ shareholding in Kotak Mahindra Bank will come down from 40 per cent to 34 per cent. RBI had asked Kotak to lower this to 30 per cent by December 2016.
(Disclosure: Kotak Mahindra and associates are significant shareholders in Business Standard Limited)
Shareholders of the Mumbai-based Kotak bank approved the merger proposal at an extraordinary general meeting in Mumbai on Wednesday. The exchange ratio has been fixed at 725 Kotak shares with 1, 000 ING Vysya shares.
ING Vysya Bank’s shareholders, too, had approved the merger proposal on Wednesday.
The share of both the banks closed five per cent higher on the BSE. The ING stock was up 5.4 per cent at Rs 925, while that of Kotak rose 5.5 per cent at Rs 1,340.
The top management of both banks had made the merger announcement on November 20, 2014. The deal will make Kotak Mahindra the fourth-largest private bank in India, in terms of total business after ICICI Bank, HDFC Bank and Axis Bank. The combined banking entity will have 1,214 branches in India. The merger needs regulatory approvals, including from the Reserve Bank of India (RBI) and the Competition Commission of India. The management of the banks expect the new entity to be operational by April 1, 2015.
The deal will also help Kotak group chairman, Uday Kotak reduce promoters’ stake in the bank, in line with the road map given by RBI.
After the merger, promoters’ shareholding in Kotak Mahindra Bank will come down from 40 per cent to 34 per cent. RBI had asked Kotak to lower this to 30 per cent by December 2016.
(Disclosure: Kotak Mahindra and associates are significant shareholders in Business Standard Limited)
