Merger of ICICI Bank with ICICI Ltd.

Presented By: Alphonsa Joseph MBA- 1(B)

Overview of ICICI
ICICI was formed in 1955 at the initiative of World Bank, the

Government of India and the representatives of Indian industry with the aim to create a development financial institution for providing medium term project financing to Indian companies.
In 1990s, ICICI transformed its business to diversified

financial services group.

In 1999, ICICI became first Indian company to be listed on

the NYSE.
It is Indians Second largest Bank with total assets of about

146,214 crores at December 31, 2004.

Overview of ICICI Bank

ICICI is an affiliate of ICICI which offers a wide range

of banking products and financial services to corporate and retail customers through a variety of delivery channels.
It covers areas of investment banking, Life and Non-

life Insurance, Venture capital and assets management.

Set up its International banking group in fiscal 2002. ICICI Banks equity shares are listed in India on Stock

Exchange, Mumbai and the NSE of India Ltd. And its ADRs are listed in NYSE.

Purpose of Strategic Move

Optimal Strategic move for both entities ICICI will have access to low cost funds of the

bank.
Enhance the value of ICICI through access to

banking services
Enhance the value od ICICI Bank through large

capital base.
Access to cheaper funds

The Process adopted for Merger

Octob er

2001
Januar y 2002

Board of Directors of ICICI and ICICI Bank approved the Merger Approval by shareholders Approval by High court of Gujarat at Ahmedabad. Approval by High court of judicature at Mumbai

March 2002

April
2002

January
30, 2002

Meeting of equity shareholders

January 31, 2002

Process of Ballot
Final Approval

Terms finalized
Merger ratio was set at two ICICI shares for every one

ICICI Bank share

Compliance with the Banking Regulations Act, 1949

and best practices of Corporate Governance.

Mr. N. Vague- Non Executive Chairman , heading the

merged entity.
JM Morgan was appointed by ICICI to advise on the

fair exchange ratio while ICICI Bank appointed DSP Merrill Lynch for the same purpose.

Results of Implementation
Business

Strong Retail Focus

Wide Reach Restructuring Operations Bearing the EXCESS of the past Subsidiary Concerns

Merger gains to ICICI Bank

Forward leap Higher size and scale of operations Offer complete product suite with immense cross-

selling opportunities.
Free float market capitalization.

Merger gains to ICICI

Ability to further diversify Lower funding costs

Increased fee income opportunities

Competitive advantages

 Gains to shareholders of ICICI Bank. Gains to Shareholders of ICICI Gains to Customers Gains to Managers and other employees

Loss due to Merger

ICICI Ltd. was at an advantage as compared to ICICI Bank

Thank You!!!