India's HDFC Bank said on Friday it had completed the country's biggest bank takeover by acquiring Centurion Bank of Punjab for around 94 billion rupees ($2.3 billion; Dh8.44 billion).
The all-share deal, agreed to by Centurion's board, will give the combined firm 1,148 branches, surpassing the second largest lender ICICI Bank's 955 branches.
Centurion Bank shareholders get one HDFC Bank share for every 29 held, making it the biggest bank takeover ever in India, HDFC told the Mumbai stock exchange.
In late afternoon trade Centurion Bank shares were down 0.35 rupee or 0.72 per cent at 48.55 rupees while HDFC Bank was down 41.05 rupees, or 2.79 per cent, to 1,430.
The balance sheet of the merged bank was estimated at 1.5 trillion rupees ($37.68 billion; Dh138.23 billion), an HDFC Bank statement said earlier this week.
The assets of HDFC, India's third largest lender, will still lag the $96 billion (Dh352.32 billion) of rival ICICI.
Analysts say they expect more takeovers of smaller banks by private sector lenders bidding to compete with the government-owned State Bank of India, the country's largest lender.
"The merger swap ratio of 1:29 values Centurion Bank of Punjab at 50.8 rupees per share ... and is expensive for HDFC Bank," said Abhishek Agarwal, an analyst with Religare Securities. (AFP)
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