ING Vysya Bank, Kotak Mahindra Bank To Merge Businesses - Quick Facts

(RTTNews) - ING Vysya Bank and Kotak Mahindra Bank announced their intention to merge their respective businesses.

The companies said 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.

It is noted that 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.

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. ING and Kotak also intend to explore areas of cooperation in cross border business.

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 about EUR 150 million to be booked at closing, and a limited positive impact on ING Bank's common equity Tier 1 ratio.

The transaction is expected to close in the second half of 2015.