Competition Commission of India (CCI), a fair trade regulator, approved the merger of IDFC Ltd and IDFC FIRST Bank on Tuesday.
While its parent company, IDFC Ltd (IDFCL), is a non-banking financial company registered with the RBI, IDFC FIRST Bank is in the business of offering banking services.
Conditions for the acquisition include the first step, which is the merging of IDFC Financial Holding into IDFC Ltd, and the second, which is the combination of IDFCL with IDFC FIRST Bank.
Additionally, CCI approved issuing new shares of the bank to IDFCL’s shareholders after cancelling the existing shares IDFC Financial Holding held in IDFC FIRST Bank.
The Reserve Bank of India (RBI) has registered IDFC Financial Holding as a non-operative financial holding company.
The deal has been approved by the Competition Commission, according to the green channel route.
“There are no horizontal overlaps or vertical/complementary linkages between the business activities of the parties in the country. Given the absence of any horizontal overlaps or vertical or complementary linkages between the parties, the transaction is being notified under the green channel route,” CCI said.
A transaction that poses no threat of having a significant detrimental impact on competition is presumed to be accepted under the green channel method once it is informed to the CCI.
The merger of IDFC FIRST Bank with its parent company, IDFC Ltd, in an all-stock transaction was announced by IDFC FIRST Bank in July.
Additionally, the boards of IDFC FIRST Bank and IDFC have approved the reverse merger and said that IDFC and IDFC Financial Holding Company will merge with IDFC First Bank as part of the composite scheme of amalgamation.
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