ICICI BANK-BOR MERGER TO GET NOD TODAY; BOR STAFF ON 3-DAY STRIKE
June, 21st 2010
The proposed merger between ICICI Bank and Bank of Rajasthan (BoR) is likely to be approved at the extra ordinary general meetings (EGM) of both the banks to be held on Monday. ICICI Banks EGM will be held at Baroda.
Meanwhile, employees of Bank of Rajasthan have announced a three-day strike starting Monday to oppose the proposed merger between the two banks. Around 4,000 employees across 460 branches of the bank are expected to support the strike.
Earlier this month, BoR employees had gone on a two-day nationwide strike. The employee unions are opposing the merger as they feel it will destroy BoRs identity and will result in job losses.
The strike will be complete in all the branches of BoR and we have the support of all employees of the BoR. This merger is against the interests of BoR employees and will not benefit the BoR, All India Bank Employees Association secretary Vishwas Utagi.
Bank offered a swap ratio of 1:4.72 for the deal25 shares of ICICI Bank for 118 shares of Bank of Rajasthan.
The merger is expected to further strengthen the branch network of ICICI Bank, which is already the largest amongst Indian private sector banks.
ICICI Bank MD & CEO Chanda Kochhar had said the deal is a win-win situation for the shareholders. BoR promoter PK Tayal is unlikely to get a seat on the board of the resultant entity. Under the share-swap ratio, the Tayal group will receive 1.88 crore ICICI Bank shares for their 8.88 crore BoR shares.
ICICI Banks last acquisition was Maharashtra-based Sangli Bank in 2007.
The last major acquisition in the countrys private sector banking space was in 2008 when HDFC Bank acquired Centurion Bank of Punjab. BoR has a total business of over Rs 23,000 crore, as against nearly Rs 3,84,000-crore of ICICI Bank. BoR's turnover was Rs 1,507 crore in 2008-09, while that of ICICI Bank in 2009-10 was over Rs 33,000 crore.
Post merger, ICICI Bank's total business will cross Rs 4 lakh crore and its branch strength will be close to 2,500.