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Kotak Mahindra-ING Vyasa Rs 15,000-croore merger deal gets CCI green signal

The Economic Times:  February 23, 2015

New Delhi: The Competition Commission of India (CCI) has cleared the merger of ING Vysya Bank with Kotak Mahindra Bank, which would create the country's fourth largest private sector lender.

The proposed Rs 15,000-crore deal is not likely to have any appreciable adverse effect on competition in India, as per the competition "The share of both entities in various relevant markets is insignificant," the CCI said in its order of Friday.

The CCI observed that the presence of large players in these markets would also act as a competitive constraint to the parties. Kotak Mahindra had announced the acquisition of ING Vysya Bank in an all-stock deal in November last year, following which it had approached CCI for approval on the deal in December.

The banks had at the time said the combined entity would leverage ING's digital banking strengths, evident from the fact that ING was among top two or three consumer banks in Germany with zero branch presence.

Bengalaru-headquartered ING Vysya has 573 branches across India and offers retail banking, corporate banking and credit card services. In addition, ING Vysya provides portfolio management, investment advisory and securities depository services to its customers.

The deal will give Kotak a significant ramp-up in its branch presence in southern India. Kotak's strength lies in retail business, while ING's strong point is its small and medium enterprises (SME) clientele. In this case, the competition regulator took into account multiple relevant markets including those for deposits, home loans, agricultural banking and card business. These were considered in accordance with the international best practices regarding assessment of mergers in banking sector .

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.