PSUs

LIC completes acquisition of IDBI Bank

By IndianMandarins- 22 Jan 2019
351

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LIC on Monday completed the acquisition of 51 percent controlling stake in IDBI Bank, marking the entry of more than 60 years old public sector insurer into the banking space. The IDBI Bank will now become a private sector lender. "The deal, conceptualized in June 2018, is envisaged as a win-win situation for both IDBI Bank and LIC with an opportunity to create enormous value for shareholders, customers & employees of both entities through mutual synergies," IDBI Bank said in a BSE filing.


In August last year, the Cabinet approved the acquisition of controlling stake by Life Insurance Corporation (LIC) as a promoter in the bank through a combination of preferential allotment and open offer of equity.

 

LIC had been looking to enter the banking space by acquiring a majority stake in IDBI Bank, as the deal is expected to provide business synergies despite the lender's stressed balance sheet.

 

Meanwhile, the IDBI Bank board has decided to continue with the existing top management, including Rakesh Sharma as the managing director of the bank.


The bank's board may take a call-in future about renaming the bank as LIC has a strong brand value.

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