Sumitomo Mitsui Banking Corporation (SMBC) has signed a definitive agreement with CA Basque Investments, a company affiliated with the Carlyle Group Inc to acquire an additional 4.2% equity stake in YES Bank, the bank said on Wednesday.
This comes after SMBC received approval from the Reserve Bank of India to acquire up to 24.99% stake in the private sector bank last month. Currently, Carlyle Group has 4.22% stake in YES Bank, according to data on NSE.
“The per‑share purchase price of the additional acquisition is the same as that of the initial acquisition, and the total purchase consideration is nearly Rs 28.5 billion (Rs 2,850 crore),” the statement said.
It added that SMBC intends to complete the additional acquisition promptly upon satisfaction of conditions precedent. Following completion of the additional acquisition, SMBC’s shareholding in YES Bank will rise to 24.2%, just marginally of the targeted 24.99%.
“Through the investments, SMBC Group will further strengthen its presence in India and will contribute to the sustainable and long-term growth of YES Bank,” the statement added.
Separately, to rebalance its strategic investment portfolio, SMBC has sold its entire 1.65% equity stake in Kotak Mahindra Bank Limited as of September 10.
SBI completes major divestment
On May 9, SMBC had entered into a definitive agreement to acquire a 20% equity stake in YES Bank from State Bank of India, and other financial institutions.
On Wednesday, SBI in an exchange filing notified that it had completed the divestment of 13.18% stake in Yes Bank to SMBC for a consideration of Rs 8,888.97 crore.
Long-term boost for YES Bank
“YES Bank restructuring plan by the RBI in 2020 was an innovative, first of its kind public sector – private sector partnership that was fully supported and facilitated by the Government of India. We are incredibly proud of the journey we have shared with Yes Bank in supporting their transformation since we came onboard as the major shareholder in 2020,” SBI Chairman C S Setty said.
He added that SMBC’s global expertise will be a great complement to Yes Bank’s ongoing progress and future ambitions.
On Wednesday, the shares of SBI closed 3.05% higher at Rs 856.90, while the shares of YES Bank closed 0.3% higher at Rs 21.07 on the National Stock Exchange.