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CCI approves merger of Fincare Small Finance Bank with AU Small Finance Bank

Published on January 23, 2024
Current Context: The Competition Commission of India (CCI) did indeed approve the proposed merger of Fincare Small Finance Bank (Fincare SFB) with AU Small Finance Bank (AU SFB) on January 23, 2024.
CCI approves merger of Fincare Small Finance Bank with AU Small Finance Bank
  • This is a significant development in the Indian banking sector, and it's expected to have a number of implications for both banks and the industry as a whole.
  • Here are some of the key details about the merger:
    • Type of merger: All-stock merger, meaning Fincare SFB shareholders will receive shares of AU SFB in exchange for their holdings.
    • Share exchange ratio: 579 AU SFB shares for every 2,000 Fincare SFB shares.
    • Valuation: Fincare SFB is valued at around three times price to book based on Q2 FY24 financials, while AU SFB is valued at approximately four times price to book.
    • Expected completion date: February 1, 2024, subject to necessary approvals.
    • Next step: The merger is now awaiting final approval from the Reserve Bank of India (RBI).

Question:

Q.1 What type of merger is the proposed merger between Fincare SFB and AU SFB?
a. Cash merger
b. Mixed merger
c. All-stock merger
d. None of the above

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