ICICI acquires Bank of Rajasthan in no-cash merger deal

In effect, the board of NYSE listed ICICI Bank at its meeting held this day approved a share exchange ratio range of 25 shares of ICICI Bank for 118 shares of Bank of Rajasthan, which works out to a simple ratio of 1:4.72 — and falls within the range recommended by chartered accountant company, Haribhakti & Co.  The Tayal family, however, promoters of BoR had hoped for a ratio of 1:3 shares. However, the proposed merger is subject to the approval of shareholders of both banks as well as the Reserve Bank of India (RBI). The ICICI Bank board considered the results covering advances, investments, deposits, properties and  branches and employee-related liabilities, and the valuation report of Haribhakti & Co, prior to recommending the above share swap ratio.

The proposed merger seeks to enhance ICICI Bank’s branch network — already the largest among Indian private sector banks — especially its presence in northern and western India. It would combine as much as 463 branches of BoR’s branch franchise with ICICI Bank’s strong capital base, to enhance the ability of the merged entity to capitalise on the growth opportunities in the Indian economy. 

JM Financial Consultants and ICICI Securities were the financial advisers to ICICI Bank on the proposed merger, while Amarchand & Mangaldas & Suresh A Shroff & Co were the legal advisers.
DH News Service