MAM
Kotak Mahindra Bank and ING Vysya Bank announce merger
MUMBAI: The Board of Directors of Kotak Mahindra Bank Ltd (“Kotak”) and the Board of Directors of ING Vysya Bank Ltd (“ING Vysya”) at their respective meetings held today have approved an all-stock amalgamation of ING Vysya with Kotak.
The amalgamation is subject to the approval of the shareholders of Kotak and ING Vysya respectively, Reserve Bank of India under the Banking Regulation Act, the Competition Commission of India and such other regulatory approvals as may be required.
Upon obtaining all approvals, when the merger becomes effective, ING Vysya will merge with Kotak. Shareholders of ING Vysya will receive shares of Kotak in exchange of shares in ING Vysya at the approved share exchange (“swap”) ratio. All shareholders of Kotak and ING Vysya will participate thereafter in the (merged) Kotak business. All ING Vysya branches and employees will become Kotak branches and employees. ING Vysya’s CEO designate, Mr Uday Sareen, will be inducted into the top management of Kotak reporting directly to Mr Uday Kotak, Executive Vice Chairman and Managing Director of Kotak.
Merger terms
The Boards of Kotak and ING Vysya respectively considered the results of a due diligence review covering areas such as advances, investments, deposits, properties & branches, liabilities, material contracts etc.
S.R.Batliboi & Co., LLP, Chartered Accountants, and Price Waterhouse & Co LLP, the independent valuers appointed by Kotak and ING Vysya respectively, have recommended a share exchange ratio, which has been accepted by the respective Boards. Avendus Capital Private Ltd. provided a Fairness Opinion to Kotak on the share exchange ratio and Edelweiss Financial Services Ltd. provided a Fairness Opinion to ING Vysya.
Accordingly ING Vysya shareholders will receive 725 shares in Kotak for 1,000 shares of ING Vysya. The share exchange ratio is considered fair and reasonable given the underlying value of ING Vysya, as also giving shareholders the ability to benefit from the potential that can be realised upon merging into Kotak.
This exchange ratio indicates an implied price of Rs.790 for each ING Vysya share based on the average closing price of Kotak shares during one month to November 19, 2014, which is a 16% premium to a like measure of ING Vysya market price.
The proposed merger would result in issuance of approximately 15.2% of the equity share capital of the merged Kotak.
One of ING Vysya’s directors will be joining the Board of Directors of Kotak.
Strategic Rationale and benefits
Kotak, with 641 branches and relatively deeper presence in the West and North, has a differentiated proposition for various customer segments including HNIs, deep corporate relationships including emerging corporates, a wide product portfolio, including agricultural finance and consumer loans, and a robust capital position.
ING Vysya has a strong customer franchise for over 8 decades, with a national branch network of 573 branches and deep presence in South India, particularly in Andhra Pradesh, Telengana and Karnataka. ING Vysya 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 corporates in India by access to the international relationships of ING Group.
The combined Kotak will have 1,214 branches, with a wide-spread pan-India network, getting both breadth and depth given the strong geographic complementarity between Kotak and ING Vysya.
Substantial efficiencies will arise out of the proposed merger, which is likely to result in significant benefits for all stakeholders, be it shareholders, employees or customers, and ultimately the banking industry:
· Customers and employees will benefit from the combined Kotak having a wider geographical spread, expertise across customer segments, such as SME, HNI, Corporates, and on products such as private banking, asset management, insurance, investment banking, NRI offerings etc.
· Kotak’s strong capital position potentially avoids capital raising and attendant dilution in the near to medium term for ING Vysya shareholders.
· Additionally, with ING Vysya nearing the cap for foreign shareholding, the merger would yield more liquidity with significant foreign headroom in Kotak even after merger, with foreign shareholding at ~47%.
Commenting on the announcement, Mr Uday Kotak, Executive Vice Chairman and Managing Director, Kotak Mahindra Bank, said – “This is a momentous occasion that brings together two banking institutions with significant complementary strengths. The opportunities and synergies that this merger will create will place Kotak and its incoming stakeholders from ING Vysya on a new trajectory of excellence and leadership. I firmly believe this merger will pave the way for a bigger and better financial services player with deep Indian roots and global standards of service. Kotak values the diversity of ING Vysya, welcomes them as its family, and will work towards integrating them smoothly on this exciting journey that is ahead of us.”
Commenting on the announcement, Mr. Shailendra Bhandari, presently MD & CEO of ING Vysya Bank Ltd, said — “Our two companies are a perfect match at a perfect time. Our customers will see tremendous value from the combined entity as we fill the gaps, in terms of a much larger footprint and a complete product suite, both national and international. Together, both companies will participate in the growth of one of India’s strongest and most successful banking franchises.”
ING Vysya’s CEO designate, Mr. Uday Sareen, said – “This is a historic day in our 84 year heritage. I truly believe that the merger is a game-changer for us, laying the foundation to help us leap-frog by several years and be part of, and further scale a truly national franchise. The combination creates a company that will deliver maximum value for our shareholders, enormous opportunities for employees and deliver the entire suite of financial products and services to our customers.”
Employees
Kotak has been rated among the best employers in the country and is renowned for its employee orientation and retention of talent. ING Vysya has a diverse set of employees, who have expertise in dealing with 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 businesses of Kotak Group.
Both organizations have strong cultures and employee best practices and the combined entity will work towards imbibing these and building a world-class organization.
ING Group
ING Group, which owns ~43% in ING Vysya, has indicated that it supports the proposed transaction. ING Group will become the largest non-promoter shareholder in combined Kotak.
ING Group and Kotak intend to explore areas of cooperation in cross border business, on the basis of a Framework for Future Cooperation that has been entered into, subject to mutual agreement on specific terms and all laws and regulations.
In addition to the experts who undertook valuation and issued fairness opinions, Ernst & Young LLP undertook due diligence review of ING Vysya for Kotak, and Amarchand & Mangaldas were legal advisors to Kotak. PricewaterhouseCoopers Private Limited carried out due diligence for ING Vysya and AZB & Partners were ING Vysya’s legal advisors.
MAM
BLR Airport Launches ‘Connections’ Service to Ease Transit Travel
New initiative targets smoother transfers as Bengaluru hub traffic rises 30 per cent.
MUMBAI: Missed connections may be a traveller’s nightmare but Bengaluru is trying to make them a thing of the past. Kempegowda International Airport Bengaluru (BLR Airport) has rolled out ‘Connections by BLR’, a new transfer programme designed to take the friction out of connecting journeys. Built around three pillars ease, efficiency and experience,the initiative aims to simplify what is often the most stressful leg of air travel.
The move comes as transfer traffic at BLR Airport climbs sharply, up more than 30 per cent year-on-year. Transfers currently account for around 15 per cent of total passenger traffic and are projected to touch 20 per cent by 2026, signalling a clear shift in how the airport is positioning itself within airline networks.
At its core, the programme focuses on making navigation intuitive and downtime more comfortable. Dedicated transfer desks have been set up across terminals, supported by colour-coded wayfinding blue and yellow signage designed for quick recognition. Inter-terminal movement is being streamlined through complimentary shuttle services with predictable wait times, while designated transfer zones aim to reduce passenger confusion.
Beyond logistics, the airport is leaning into experience. Travellers in transit now have access to a wider choice of lounges, curated retail and food and beverage options, as well as sleeping pods for short stays. For longer layovers, transit hotels in both Terminal 1 and Terminal 2 offer boutique in-terminal accommodation, an increasingly sought-after feature as global travel patterns evolve.
The timing is strategic. BLR Airport now connects to 114 passenger destinations 80 domestic and 34 international with key routes spanning Delhi, Mumbai, Kolkata, Hyderabad and Pune domestically, and Singapore, London Heathrow, Dubai, Abu Dhabi and Kuala Lumpur internationally. Recent additions such as Hindon, Bidar and Silchar within India, alongside Dammam, Hanoi and Riyadh overseas, are further expanding its reach.
Infrastructure is also catching up with ambition. Developments including the West Cross Taxiway, Terminal 1 refurbishment and Terminal 2 expansion are laying the groundwork for higher capacity and smoother operations critical for any airport aiming to become a serious transfer hub.
Bangalore International Airport Limited chief operating officer Girish Nair framed the initiative as both a response to demand and a forward-looking play. He pointed to the growing depth of the airport’s network and the opportunity to build a more reliable transfer ecosystem that benefits both passengers and airline partners.
In an era where travel is as much about transitions as destinations, BLR Airport is betting that a seamless connection might just be the journey’s most important upgrade.
