On 19th November 2014 Kotak Mahendra Bank announced buying ING Vysya Bank which is latest merger in banking sector in India. After this take over, Kotak Mahendra would occupy 4th position in private sector bank in India after ICICI, HDFC & AXIS Bank. This news was announced by Kotak Mahendra & ING Vysya in a join press release on 19th Nov.2014. The current market capitalization of shares of ING Vysya is around 1/6 of Kotak Mahendra but branch network of ING Vysya is around 90% of branch network of Kotak Mahendra bank and hence greatest advantage to Kotak Mahendra would be in terms of large number of branches of ING Vysya as number of branches would go up to 1214 of merged bank.
As per deal finalized, ING share holders will get 725 Kotak shares in exchange of 1000 shares. This exchange ratio would indicate an implied price of Rs 790 for each ING shares through the closing market rat,e of these shares on 20.11.14 went up to Rs 814.
With this merger, Kotak Mahendra Bank would get access to more branches in south India in States like Andhra Pradesh, Karnataka & Tamil Nadu as Kotak Mahendra has less branches in these States and ING Vysya has more branches in these States. Further, Kotak Mahendra would get access to urban client as 65% branches of ING Vysya are in urban & metro regions.
This merger would give high return on shares to the promoters of ING Vysya, it would facilitate large branch network and customer base to Kotak Mahendra which would thus be a gainer in long run.