HDFC Bank Gets Board Approval For $40 Bn Merger With HDFC
HDFC Bank has received final board approval for its merger with Housing Development Finance Corporation (HDFC). This historic merger, valued at approximately USD 40 billion, is set to create a financial services powerhouse in India.
The approval comes after HDFC Bank's board convened an after-hours meeting on Friday to discuss the merger. In a regulatory filing, the bank stated that the scheme under Sections 230 to 232 of the Companies Act, 2013, had been approved by its board of directors, subject to the receipt of necessary statutory and regulatory approvals.
The merger, scheduled to take effect from 1 July 2023, will mark a significant milestone in India's corporate history. The combined entity is estimated to be valued at USD 168 billion, with a massive impact on millions of customers, shareholders, and businesses associated with both companies, including group insurance and asset management operations. The newly formed entity will boast a substantial asset base of around Rs 18 lakh crore.
Expressing his enthusiasm for the merger, Sashi Jagdishan, CEO and MD at HDFC Bank, referred to it as a defining event and expressed confidence in the combined strength of the two organisations. Jagdishan also extended a warm welcome to the talented team of HDFC Ltd., emphasising their collective journey towards creating a holistic ecosystem of financial services. He further highlighted the importance of agility, adaptability, and a relentless pursuit of excellence in navigating the path ahead.
The regulatory filing also outlined the timeline for key activities related to the merger. On 13 July, HDFC Bank will determine the share allotments for HDFC shareholders, while the transfer of HDFC's non-convertible debentures to the bank is scheduled for 12 July. Additionally, commercial papers will be transferred to HDFC Bank on July 7.
