ICICI Bank seen in merger talks with Centurion to build size, reach
George Cherian
MUMBAI 15 DECEMBER
THERE's no stopping the deal mania that's gripped India Inc. Hot on the heels of the merger of TimesBank with HDFC Bank, ICICI Bank is understood to have begun talks with Centurion Bank to create another private sector goliath.
According to sources, the top management of parent ICICI and the promoters of Centurion Bank ? the main promoters of the two banks ? have held "detailed discussions" on possible ways to come together. This includes the merger of Centurion Bank with ICICI Bank through an equity swap.
The merger would create the largest new private sector bank in the country with assets of around Rs 10,000 crore, compared with HDFC Bank-TimesBank?s Rs 7,500 crore. The combined market capitalisation of ICICI Bank-Centurion would be the third-largest among banks, after SBI's and HDFC Bank-TimesBank's. The market cap of ICICI Bank-Centurion Bank at present stands at a little over Rs 1,200 crore, which is a third of HDFC Bank-TimesBank's market cap of Rs 3,600 crore (up from Rs 2,300 crore when the merger was announced about a month ago).
Centurion Bank is seen as an ideal fit for ICICI's strategy, given its large retail asset portfolio ? which was recently acquired from 20th Century Finance ? and its huge network of branches. The merger will enable ICICI managing director and CEO KV Kamath and his team to leapfrog their distribution network targets by at least four years. On the other hand, for Centurion's main promoter Dev Ahuja, it makes strategic sense to align with a large player with a technological edge rather than compete as just another bank.......
1 crore=10 million
$1 =Approx Rs 43.4
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