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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!!!
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