IDFC Bank, Capital First announce merger

IDFC Bank Capital First announce merger

IDFC Bank Capital First announce merger

The boards of IDFC Bank and Capital First on Saturday agreed to a merger which will result in V Vaidyanathan, now chairman and md of Capital First, succeeding Rajiv Lall as md and ceo of the merged entity.

The announcement is pursuant to IDFC Bank's stated strategy of "retailising" its business to complete their transformation from a dedicated infrastructure financier to a well-diversified universal bank, and in line with Capital First's stated intention and strategy to convert to a universal bank.

According to terms of the deal announced on Saturday, shareholders in Capital First will receive 139 shares of the bank for every 10 shares held.

V Vaidyanathan, who is now chairman and MD of Capital First, will succeed Lall as MD and CEO of the combined entity upon completion of the merger and necessary regulatory approvals. Rajiv Lall who led IDFC Group from 2005 to the present in various top positions will step into the role of non-executive chairman of the merged bank.

Capital First, which also counts Singapore state investor GIC among its major investors, will bring in a loan book of nearly 230 billion rupees as of September 30, three million customers and a distribution network spanning 228 locations across the country. He will replace Veena Mankar who will continue to remain on the board.

The deal values Capital First - owned more than a third by private equity firm Warburg Pincus - at 938.25 rupees a share based on the two companies' Friday closing price and giving the company a market value of 92.78 billion rupees ($1.46 billion), Reuters calculations showed. The deal, however, has to get the approval of Reserve Bank of India (RBI) and other maket regulators.