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Banks (Finance)

SMBC Acquires Additional Stake in YES Bank for Rs 2,850 Crore

Strategic Insights

— 2 min read

The Reserve Bank of India (RBI) has given its approval for Sumitomo Mitsui Banking Corporation (SMBC) to acquire up to 24.99% stake in YES Bank, part of the bank's restructuring plan from 2020. This approval allows SMBC to acquire an additional 4.2% equity stake in YES Bank from Carlyle Group, raising its holding to 24.2%. The deal is valued at Rs 2,850 crore, and the bank intends to complete the acquisition promptly.

Key Takeaways:

  • SMBC will acquire an additional 4.2% stake in YES Bank from Carlyle Group for Rs 2,850 crore, raising its holding to 24.2%.
  • The Reserve Bank of India (RBI) has approved SMBC to hold up to 24.99% stake in YES Bank as part of the bank's restructuring plan from 2020.
  • The deal between SMBC and CA Basque Investments, a company affiliated with the Carlyle Group Inc, includes the acquisition of an additional 4.2% equity stake in YES Bank at the same per-share purchase price as the initial acquisition.
  • Following completion of the additional acquisition, SMBC's shareholding in YES Bank will rise to 24.2%, just marginally short of the targeted 24.99%.
  • The acquisition aims to strengthen SMBC's presence in India and contribute to the sustainable and long-term growth of YES Bank.
  • SMBC has also sold its entire 1.65% equity stake in Kotak Mahindra Bank Limited, as part of rebalancing its strategic investment portfolio.
  • State Bank of India (SBI) has completed the divestment of 13.18% stake in Yes Bank to SMBC for a consideration of Rs 8,888.97 crore.
  • The SBI Chairman C S Setty attributed the success of YES Bank's restructuring plan to the partnership between the government, RBI, and SBI, and expressed confidence in SMBC's expertise complementing YES Bank's ongoing progress.

Statistics:

  • The total purchase consideration for the additional 4.2% stake in YES Bank is approximately Rs 28.5 billion (Rs 2,850 crore).
  • The additional acquisition is valued at the same per-share purchase price as the initial acquisition.
  • SMBC's total shareholding in YES Bank will rise to 24.2% following the completion of the additional acquisition.
  • The RBI-approved stake in YES Bank is up to 24.99%.
  • The divestment of 13.18% stake in YES Bank to SMBC by SBI was for a consideration of Rs 8,888.97 crore.

Sources:

  • "SMBC acquires additional stake in YES Bank for Rs 2,850 crore" (IE Online Media Services Pvt. Ltd.)
  • "SMBC to acquire 4.2% stake in YES Bank from Carlyle Group" (Contify.com)

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