The biggest merger in Indian banking is about to happen. HDFC Bank will take over Centurion Bank of Punjab (CBoP) in an all-stock deal.
The respective bank boards are likely to meet on Saturday to consider the merger proposal. The share-swap deal, worth over Rs 10,000 crore, may be worked around the current market price of Rs 57 a share of CBoP.
In the pecking order, the merged entity will still be way below India’s biggest private sector bank ICICI in terms of assets, but it will be significantly bigger than Axis Bank.On Wednesday, officials of both the banks held marathon meetings with a leading investment banker to discuss the finer points.
ET had first reported on February 13 that Centurion Bank was exploring a merger and HDFC Bank was one of institutions it was in talks with.
This is the second time after almost six years that these two banks are discussing a merger. While last time it fell through on valuation reasons, what has worked this time is the personal equation between the top brass of the two banks.
HDFC Bank MD Aditya Puri, CBoP chief executive Shailendra Bhandari and CBoP chairman Rana Talwar are all ex-Citigroup bankers.
Mr Bhandari was also a part of the core team that set up HDFC Bank in ‘94. Interestingly, Citigroup is also the single biggest shareholder in HDFC - the mortgage giant and parent of HDFC Bank.
Posted By Staff Reporter
in Punjab News
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