India-based IndusInd Bank Ltd. agreed to acquire Bharat Financial Inclusion Ltd. in an all-stock transaction.
Under the proposed deal, Bharat Financial shareholders will receive 639 shares of IndusInd Bank for every 1,000 shares of Bharat Financial. The share-exchange ratio implies a premium of 12.6% to Bharat Financial over the two-week volume weighted price.
The proposed deal is subject to approval from the companies' shareholders and regulators, including the central bank of India, the companies said Oct. 14. Following closing of the deal, Bharat Financial will become a subsidiary of IndusInd Bank.
All employees of Bharat Financial will become part of IndusInd Bank. Following the deal, IndusInd Bank will have more than 3,600 banking outlets, excluding ATMs.
IndusInd Bank said it expects the deal to be value accretive from day one given its lower cost of funds and ability to monetize excess priority sector lending qualifying assets, among other things.