MERGER WITH

By:Phani Tejaswi Ch (118916)

ICICI BANK
It is a major banking and financial services

organization in INDIA.
It is the second largest bank in India and the largest private sector bank in India by market capitalization. The Bank has a network of 2,755 branches and 9,363 ATMs in India, It has a presence in 19 countries, including India.

Why ICICI wants a merger.????

ICICI Bank is facing stiff competition from HDFC Bank and also the resurging Axis Bank. To remain as the top private player, it needs to grow bigger and what better way to grow the path of Merger.

BANK OF RAJASTHAN
It was set up at Udaipur in 1943 with an initial capital of Rs.10.00 lakhs. The bank's central office is located at Jaipur, while registered office is in Udaipur. It was classified as the Scheduled Bank in 1948. At that time bank has 463 branches and 111 ATMs.

It made a net loss of Rs.10 crores in the nine months

ended December 31, 2009.

ANALYSIS
The valuation is done by an independent valuer

jointly appointed by both banks.

ICICI Bank said that it willing to pay more than

BOR present market valuation.

The deal valued at about Rs 3,041 crores. The share exchange ratio of 25 shares of ICICI Bank for every 118 shares of BOR.

Why ICICI wants to merge with BOR???????

ADVANTAGES
Substantial enhancement of ICICI Bank network.

It offers a strategic fit, as it adds to ICICI network in

north and western India.

It saves ICICI about three years time to market.

o It takes about a year to set up 500 Branches o Three years for the branches to come up to the kind of deposit levels.

ADVANTAGES
ICICI have a high capital adequacy ratio, so the customer base that they are acquiring will help them in lending. The customers of BOR may now enjoy would class personal banking experience.

DISADVANTAGES
ICICI Bank has valued BOR at a whopping 3041 crores which is much more than its market capitalization.

It values the acquired bank at 2.9 times the book value in

comparison to 1.89 times

Shares of ICICI bank were down by over 7% and BOR

shares hit an upper circuit of 20%. ICICI's stock came down from Rs 902 to Rs 834.8 BORs stock went up from Rs.80 to Rs.188.42

CONCLUSION
By taking all these advantages and disadvantages into consideration ICICI had finally decided to merge with BOR.

The Merger was said to be a Horizontal merger and it was

announced on May 18,2010.

On 13th Aug Bank of Rajasthan Ltd, had become part of

ICICI bank Ltd.

REFERENCES
ICICI-BoR merger deal valued at Rs 3041 crores http://timesofindia.indiatimes.com/business/indiabusiness/ICICI-BoR-merger-deal-valued-at-Rs-3041crore/articleshow/5966378.cms? BoR to be merged with ICICI http://timesofindia.indiatimes.com/business/indiabusiness/BoR-to-be-merged-withICICI/articleshow/5946620.cms? MERGER http://www.scribd.com/doc/54544609/Merger

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