merger of icici bank with icici ltd

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  • 8/3/2019 Merger of ICICI Bank With ICICI Ltd

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    Presented By:

    Alphonsa JosephMBA- 1(B)

    Merger of ICICI Bank with ICICI

    Ltd.

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    Overview of ICICI

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

    Government of India and the representatives of Indianindustry with the aim to create a development financialinstitution for providing medium term project financing toIndian companies.

    In 1990s, ICICI transformed its business to diversifiedfinancial services group.

    In 1999, ICICI became first Indian company to be listed onthe NYSE.

    It is Indians Second largest Bank with total assets of about146,214 crores at December 31, 2004.

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    Overview of ICICI Bank ICICI is an affiliate of ICICI which offers a wide range

    of banking products and financial services tocorporate and retail customers through a variety ofdelivery channels.

    It covers areas of investment banking, Life and Non-life Insurance, Venture capital and assetsmanagement.

    Set up its International banking group in fiscal 2002.

    ICICI Banks equity shares are listed in India on StockExchange, Mumbai and the NSE of India Ltd. And its

    ADRs are listed in NYSE.

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    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 tobanking services

    Enhance the value od ICICI Bank through largecapital base.

    Access to cheaper funds

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    The Process adopted for Merger

    October

    2001

    Board of Directors of ICICI and ICICI Bankapproved the Merger

    January 2002

    Approval by shareholders

    March2002

    Approval by High court of Gujarat atAhmedabad.

    April2002

    Approval by High court of judicature atMumbai

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    January30, 2002

    Meeting of equityshareholders

    January31, 2002

    Process of Ballot

    Final Approval

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    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 themerged entity.

    JM Morgan was appointed by ICICI to advise on thefair exchange ratio while ICICI Bank appointed DSPMerrill Lynch for the same purpose.

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    Results of Implementation Business

    Strong Retail Focus

    Wide Reach

    Restructuring Operations Bearing the EXCESS of the past

    Subsidiary Concerns

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    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.

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    Merger gains to ICICI

    Ability to further diversify

    Lower funding costs

    Increased fee income opportunities

    Competitive advantages

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    Gains to shareholders of ICICI Bank.

    Gains to Shareholders of ICICI

    Gains to Customers

    Gains to Managers and other employees

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    Loss due to Merger

    ICICI Ltd. was at an advantage as compared to ICICI

    Bank

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    Thank You!!!