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Mega merger: Kotak Bank to buy ING Vysya in all share deal

The merger would be done through a share swap in which 725 equity shares of Rs 5 each of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.

The News International Team

In a major banking deal that will create India’s fourth largest private lender, Kotak Mahindra Bank announced the acquisition of mid-sized player  ING Vysya Bank in an all-share transaction. The merger would be done through a share swap in which 725 equity shares of Rs 5 each of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.

“Post amalgamation, shareholders of ING Vysya Bank will receive shares of Kotak Mahindra Bank in the aforementioned ratio, resulting in change in shareholding of the Kotak Mahindra Bank,” Kotak Mahindra Bank said in a press release.

This merger is subject to approval of shareholders of both the banks. It also requires statutory nod from the Reserve Bank of India and and Competition Commission of India (CCI).

The swap ratio indicates price of Rs 790 for each ING Vysya Bank share. The proposed merger would result in issuance of approximately 15.2 percent of the equity share capital of the merged Kotak, the press statement added.

Executive Vice Chairman and Managing Director Uday Kotak tweeted that he is excited to announce the merger of Kotak Mahindra Bank with ING Vyasa Bank and will work to create stakeholder value.

Chairman and managing director of Mahindra Group Anand Mahindra also congratulated Uday Kotak on Twitter calling the deal a brilliant move.

Meanwhile, speaking at a press briefing while announcing the contours of the merger, Uday Kotak said that this is a momentous occasion for Kotak, ING and the Indian financial sector. Upon merger ING will be the second largest shareholders and 17 Kotak subsidiaries will be subsidiaries of merged entity.

Continuing his positive tone, Kotak said that the bank will leverage digital banking strength of ING Vysya Bank. Upon Merger, Kotak Mahindra Bank will have 1,214 branches. “The branch density is complementary in Mumbai and Delhi at 124 each,” he added.

The Deputy CEO of ING Vysya Bank Uday Sareen will be inducted into top management of Kotak Mahindra Bank. Netherlands-based ING holds 42.73 percent stake in ING Vysya Bank.

Kotak Mahindra Bank hopes to get regulatory approvals for acquisition of ING Vysya Bank by April 1.

Calling this buyout a very good deal, Keki Mistry, VC, HDFC told CNBC-TV18 that the valuation of the deal is good. “I would like to congratulate Uday. The valuation is good, I understand it is around 2.5 times the book. So that is a great valuation and I am sure it adds a lot to Kotak’s suite of product that they offer.”he added.

Kotak Mahindra stock price

On November 13, 2014, Kotak Mahindra Bank closed at Rs 1157.05, up Rs 78.55, or 7.28 percent. The 52-week high of the share was Rs 1163.70 and the 52-week low was Rs 630.80.


The company’s trailing 12-month (TTM) EPS was at Rs 21.02 per share as per the quarter ended September 2014. The stock’s price-to-earnings (P/E) ratio was 55.05. The latest book value of the company is Rs 159.14 per share. At current value, the price-to-book value of the company is 7.27.

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