ING Vysya Bank employees have given a notice for a strike on January 7, opposing the proposed deal where Kotak Mahindra Bank is buying it in an all-stock deal, as per a stock market disclosure. ING Vysya is scheduled for an EGM to approve the $2.4 billion deal with Kotak Mahindra on the same day.
In another development, UFBU (United Forum of Bank Unions) has given a notice to IBA for industry wide strike on January 7 besides January 21-24, demanding wage revision to be settled immediately.
ING Vysya employees are concerned about job security after the merger. Mergers typically tend to lead to some rightsizing and this deal could see some layoffs especially where both Kotak Mahindra and ING Vysya currently have branches located in each other’s vicinity.
Last month, the board members of both Kotak Mahindra and ING Vysya Bank had approved a proposal to merge both the banks through an all stock transaction worth over $2.4 billion.
Uday Kotak had said there will not be “any dramatic” reduction immediately in the number of employees following the merger of ING Vysya Bank.
The merged firm would have 1,214 branches, 1,794 ATMs points, 39,811 employees, total income (based on FY14 numbers) of Rs 13,576 crore and PAT of Rs 3,123 crore; total asset of Rs 1,98,983 crore with advances of Rs 1,20,976 crore and deposits worth Rs 1,10,963 crore.
This would be the first significant M&A in the banking sector since 2010, when ICICI Bank snapped Bank of Rajasthan, and the second-biggest ever in the sector, as per data collated by VCCEdge, the data research platform of VCCircle. In 2008, Centurion Bank of Punjab merged with HDFC Bank in a $2.9 billion deal.
With this, Kotak would consolidate its position as the fourth largest private lender in the country, behind ICICI Bank, HDFC Bank and Axis Bank.
ING Vysya shareholders will own approximately 15.2 per cent of the equity share capital of the merged Kotak.
Shares of ING Vysya Bank were trading at Rs 856.55 each, down 0.17 per cent while Kotak Mahindra’s scrip was down 0.22 per cent at Rs 1240.65, on BSE, in a flat Mumbai market on Tuesday at 12.27 PM.