The document details the merger between Kotak Mahindra Bank and ING Vysya Bank, announced on November 20, 2014, valued at Rs. 148.51 billion, with a share exchange ratio that allows ING Vysya shareholders to receive Kotak shares. This strategic merger aimed to enhance geographic presence, customer base, and access to international business, while addressing regulatory approvals and the challenges posed by employee concerns. The transaction signifies a shift towards consolidation in the banking sector, with expected benefits for stakeholders and overall efficiencies for the combined entity.

1. “MERGER BETWEEN
KOTAK MAHINDRA BANK
AND INGVYSYA BANK”
UNDER GUIDANCE OF MR.VIVEK BHATIA
( CORPORATE MERGERS,ACQUISITIONS & RESTRUTURING)
PRESENTED BY,
JITHIN KOSHY
SHASHANK
MUSHAFA
HONEY
VIPUL

2. INTRODUCTION
OF KOTAK BANK
 Kotak Mahindra Bank is an Indian private sector bank
headquartered in Mumbai, Maharashtra, India. In
February 2003, Reserve Bank of India gave the licence
to Kotak Mahindra Finance Ltd, To carry on banking
business.
 Headquarters: Mumbai
 Founder: Uday Kotak
 Founded: 1985
 Subsidiaries: Kotak Securities, Kotak Life Insurance

3. CONTD….
 It offers a wide range of banking products and financial
services for corporate and retail customers through a
variety of delivery channels and specialized subsidiaries
in the areas of personal finance, investment banking, life
insurance, and wealth management.
 Kotak Mahindra Bank has a network of 1,369 branches
across 689 locations
 In 2017, it is the third largest private bank in India by
market capitalization of Rs.191,342.91 cr.

4. INTRODUCTION
OF ING VYSYA
BANK
 ING Vysya Bank was a privately owned Indian
multinational bank based in Bangalore, with retail,
wholesale, and private banking platforms formed from
the 2002 purchase of an equity stake in Vysya Bank by
the Dutch ING Group.
 Headquarters: Bengaluru
 Revenue: 55.88 billion INR (US$870 million)
 Founded: 2002, India
 Net income: 6.13 billion INR (US$91 million)

5. CONTD…
 The merger with the Dutch ING marked the first ever
merger between an Indian bank and a foreign bank.
 March 2013, ING Vysya was the seventh largest private
sector bank in India with assets totaling ₹54,836
crore (US$8.6 billion) and operating a pan-India
network of over 1,000 outlets, including 527 branches,
which serviced over two million customers

7. On November 20, 2014, Kotak announced the merger with ING
Vysya in an all-stock deal worth of Rs. 148.51 billion or US$2.4
billion.
On regulatory approval, all of ING Vysya’s branches and
businesses would merge with Kotak. ING Vysya’s shareholders
would get 0.725 share of Kotak stock for every one stock of ING
Vysya they held i.e., 725 shares of Kotak for every 1,000 shares of
ING Vysya.
This exchange ratio indicated that the implied price of each stock of
ING Vysya was Rs. 790 which was based on the average stock price
of Kotak and ING Vysya for one month – from October 20, 2014, to
November 19, 2014 – which came to Rs. 1089.50 and Rs. 682
respectively

8. Chronology
of Events
 September 2013- Reports of ING’s intention to sell its
stake in ING Vysya and Kotak being the front runner 8
 November 20, 2014- Scheme is approved by the board
of directors of Kotak and ING respectively
 January 7, 2015- The Scheme is approved by the
Shareholders of Kotak and ING respectively
 February 12, 2015- Merger receives CCI approval
 April 1, 2015- Appointed Date of the Scheme
 April 1, 2015- Date on which RBI approved of the
Scheme
 July 3, 2015- Date of FIPB approval to increase the
aggregate foreign investment in Kotak
 September- 30, 2015 Long Stop Date

9. Deal
structure
Shareholding in Kotak before the Merger
Promoter Group: 40.02%
Public Shareholding: 59.98%
￭ FIIs: 36.85%
￭ Mutual Funds/ UTI: 1.65%
￭ Financial Institutions/ Banks: 0.21%
￭ Foreign Banks: 4.25%
￭ Foreign Bodies: 2.04%
￭ Bodies Corporate: 3.30%
￭ Individuals: 10.27%
￭ Others: 1.41%

10. CONTDS…
 Shareholding in ING Vysya before the Merger
Promoter Group: 42.51%
Public Shareholding: 57.49%
￭ FIIs: 26.98%
￭ Mutual funds/ UTI: 13.43%
￭ Financial Institutions/ Banks: 1.76%
￭ Bodies Corporate: 5.36%
￭ Individuals: 8.14%
￭ Others: 1.82%

11. CONTDS…
 Post-merger Shareholding in Kotak
Promoter Group: 33.99%
Public Shareholding: 66.01%
￭ ING Group: 6.48%
￭ FIIs: 33.58%
￭ Domestic: 19.12%
￭ FDI: 6.83%

12. Other driving
forces for
both Parties
to close this
Deal
A) ING Group’s Exit from India:- Though not officially
announced by the Group, there have been numerous
reports since 2013 of INGs intention to divest and exit
India. NG which took a hit in the Global recession was
heavily indebted to the Dutch government. This was
followed by the sale of its INR 11 Billion stake in ING
Vysya Life Insurance in late 2013, and more reports of
ING’s plan to sell its stake in ING Vysya.
B) RBI Directive to Uday Kotak:- In May 2014, Uday
Kotak received a directive from RBI to reduce his
shareholding in the Bank to 20% (from 45.3% at that
time) by December 2018. He was to reduce it to 30% by
December 2016. Pursuant to the Deal, the promoter’s
stake in the Company will be reduced to 33% putting him
well on his way to meet the requirements of the directive.

13. Synergies
out of the
deal
 The merger increased the geographical presence and
further deepened Kotak’s network because of
complementary network of ING Vysya. The merger
increased Kotak’s number of branches and its ATMs
network by 47% and 35% to 1,214 and 1,794.
 Before the merger, 80% of the Kotak’s branches were in
the western and northern parts of the country and only
15% were in the southern part of India. On the other
hand, ING Vysya had a greater presence in the southern
part of the country with 64% of its branches located
there and only 32% its branches in the western and
northern parts of the country. Using this Kotak bank can
balance its presence in all parts of India.

14. CONTDS…
 Increase in customer base for kotak bank.
 Access to International business: In the past, ING Vysya
has served a number of large international corporates in
India. The merged entity will leverage ING Group’s
international expertise and presence to kotak bank.
 Deposits and advances: As on 30th Sep 2014, the
advances and deposits of ING Vysya bank were Rs.
39,558 crore and Rs. 44,652 crore respectively. The
corresponding figures for Kotak Mahindra bank were
81,418 crore and Rs. 66,311 crore. Current Accounts/
Savings Accounts (CASA) were approximately 33% of
ING’s deposit base and about 29% of Kotak’s. The
merged entity is expected to have a wider network.

15. Challenges
of the deal
 Protest by the ING Vysya bank employees regarding job
security.
 Cultural diffrences
 Competition by other private and public sector banks

16. Approvals &
regulations
requirements
 Board and shareholders approval
 RBI Approval mandatory one
 Merger guidelines
 CCI Approval
 FIPB Approval

17. STRATEGIC
RATIONAL
AND
BENEFITS
 Kotak has 641 branches and relatively deeper presence in the
west and north, has differentiated proposition for various
customer segments including HNIs, deep corporate relationships
including emerging corporates, wide product portfolio, including
agricultural finance and consumer loans and a robust capital
position.
 INGVysya has a strong customer franchise for over 8 decades with
a national branch network of 573 branches and deep presence in
South India, particularly inAndhra Pradesh,Telengana and
Karnataka. INGVysya has a large customer base across all
segments. It is particularly noted for a best-in-class SME business
as also for serving large international corporate in India by access
to the international relationship of ING group.
 The combined Kotak will have 1,214 branches with a wide-special
pan India network.

18. CONTDS…
 Substantial efficiencies will arise out of the proposed merger ,
which is likely to result in significant benefits for all stakeholders ,
employees or customer and ultimately the banking industry.
 Kotak has been rated among the best employers in the country
and is renowed for its employees orientation and retention of
talent. INGVysya has a diverse set of employees, who have
different customer segments.The combined entity will generate
ample career opportunities for staff as well as a wider array of
products to serve their customers, aided by management
development opportunities across different business of Kotak
Group.
 Both organization have strong cultures and employee best
practices and the combined entity will work towards imbibing
these and building a world-class organization.

19. Opportunities
which give a
thrust to the
merger deal
 “Make in India” opportunities that can be encashed upon
by the merged entity
 Focus on digital customer—the merging banks can
complement each other by reaching larger customers by
providing the best of their technologies
 Financial inclusion—Kotak Mahindra bank can make
use of the ING Vysya bank’s presence in the SME
sector.

20. COMPANIESFINANCIALPOSITION

21. Kotak bank 2015 2014 2013 2012 2011 (CR.)
MARCH
RESERVE 13754.91 11889.93 9073.65 7575.59 6428.04
SHARE
CAPITAL
386.18 385.16 373.3 370.34 368.44
TOTAL DEBT 87010.02 71967.91 71439.39 55132.04 40984.92
INCOME 11748.32 10166.83 9203.15 7157.59 4970.25
NET PROFIT 1856.98 1502.52 1360.72 1085.05 808.18
EPS 24.16 19.51 18.23 14.65 11.1

22. ING VYSYA
BANK
2015 2014 2013 2012 2011 (CR.)
MARCH
SHARE
CAPITAL
188.64 154.85 150.12 120.99 119.97
RESERVE 6882.18 4471.06 3828.08 2501.42 2099.94
TOTAL
DEBT
50885.25 47845.26 40891.91 34341.61 29536.69
INCOME 6072.34 5588.46 4526.57 3349.02 2853.11
NET
PROFIT
657.85 612.96 456.3 318.65 242.22
EPS 34.87 39.58 30.4 26.34 20.19

23. Conclusion
 The deal between Kotak and ING Vysya has sparked
hopes of wider consolidation in the banking sector. In
the past, consolidations took place between weak and
strong banks on RBI’s directives. The present
consolidation between 2 strong banks has brought in
discussions about voluntary mergers between 2 strong
entities in the banking industry.
 The deal was announced after the markets closed on
Nov 20, 2014. Welcoming the deal, the benchmark
Sensex advanced 0.12% to 28,067.56 points and the
Banks gained 0.37% to 20,204.71 points. The prices of
both the banks’ shares surged. Shares of Kotak
Mahindra Bank gained 7.28% to Rs. 1,157.05 on the
Bombay Stock Exchange (BSE), while shares of ING
Vysya Bank rose 7.15% to Rs. 814.20.