The Competition Commission will look at the overall market share and size of the combined entity in the case of ING Vysya Bank’s merger with Kotak Mahindra Bank when the proposal comes before the regulator for its approval.
In the biggest merger in India’s banking sector, Kotak Mahindra Bank yesterday announced the buyout of ING Vysya Bank in an all-stock deal valued at Rs15,000 crore.
“I suppose in due course they (the two banks) will make a filing to the Competition Commission. We will look at it as we look at any other merger proposal,” the Competition Commission of India (CCI) Chairman Ashok Chawla told reporters here.
“The matter that will engage our attention is that the combined entity, what will be its market share and how big that will be. Based on that a decision will be taken within parameters of competition law,” he said.
Chawla was responding to a query on what aspects of the deal the Commission would be looking into. He was speaking on the sidelines of Skoch Summit here.
CCI keeps a tab on anti-competitive practices at the market place across sectors and works to prevent as well as curb such activities.
Under the all-stock deal, ING Vysysa stock has been valued at CCI will look at combined mkt share790 a share, which is a 16 per cent premium to the 30-day stock price as of November 19, while pegging Kotak Bank at Rs1,119 a share in similar manner.
Accordingly, ING shareholders would get 725 Kotak Mahindra Bank shares for 1000 shares of the Bangalore based lender. This values ING Vysya Bank at Rs15,033 crore.