Did CCI Approve SMBC's Acquisition of Shares in Yes Bank?
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Synopsis
In a significant move for the banking sector, the CCI has approved SMBC's acquisition of a stake in Yes Bank, marking a pivotal moment in India's financial landscape. This decision not only reflects trust in Yes Bank's future but also highlights the growing interest of foreign banks in India's banking sector.
Key Takeaways
- CCI approval for SMBC's acquisition of Yes Bank.
- SMBC to acquire 24.99 per cent stake.
- RBI approval valid for one year.
- SMBC not recognized as a promoter.
- Significant interest from foreign banks in India's banking sector.
New Delhi, Sep 2 (NationPress) The Competition Commission of India (CCI) has granted approval for the Sumitomo Mitsui Banking Corporation to acquire a portion of share capital and voting rights in Yes Bank.
According to the CCI, "The proposed combination involves the acquisition of share capital and voting rights of YES Bank by Sumitomo Mitsui Banking Corporation (SMBC)."
Last month, Yes Bank announced that SMBC had received authorization from the Reserve Bank of India (RBI) to purchase a 24.99 per cent stake in the bank.
This regulatory approval, issued on August 22, remains valid for one year, as indicated in an exchange filing by the private sector lender.
Nevertheless, the RBI clarified that with this stake acquisition, SMBC would not be recognized as a promoter of the bank.
The initial announcement regarding the stake purchase was made on May 9 this year, revealing that SMBC had acquired 20 per cent of Yes Bank through a secondary transaction — which included 13.19 per cent from State Bank of India and a total of 6.81 per cent from seven other banks: Axis Bank, Federal Bank, Bandhan Bank, ICICI Bank, HDFC Bank, IDFC First Bank, and Kotak Mahindra Bank.
SMBC is a commercial bank based in Japan and operates as a wholly-owned subsidiary of Sumitomo Mitsui Financial Group. In contrast, Yes Bank is a publicly listed private sector bank that provides a variety of banking and financial services.
In another recent development, the CCI has also approved a proposed combination concerning the acquisition of up to 100 per cent shareholding by Manipal Hospitals Private Limited in Sahyadri Hospitals Private Limited.
Manipal Hospitals Private Limited (the acquirer) is a wholly owned subsidiary of Manipal Health Enterprises Private Limited (MHEPL), while Sahyadri Hospitals Private Limited (the target) operates a chain of multi-speciality hospitals in Maharashtra, providing comprehensive tertiary and quaternary healthcare services.
The proposed combination will be executed in multiple tranches for the acquisition of up to 100 per cent shareholding by the acquirer in the target.
Point of View
The recent approval by the CCI signifies a positive shift in the banking landscape of India. It showcases the confidence that international players like SMBC have in Indian banks. This acquisition could potentially enhance Yes Bank's operations and stability, aligning with the nation's economic goals.
NationPress
02/09/2025
Frequently Asked Questions
What is the stake percentage that SMBC is acquiring in Yes Bank?
SMBC is acquiring a 24.99 per cent stake in Yes Bank.
When did the RBI grant approval for this acquisition?
The RBI granted approval for the acquisition on August 22.
Will SMBC be considered a promoter of Yes Bank after the acquisition?
No, the RBI clarified that SMBC will not be treated as a promoter of Yes Bank.
What is the total percentage of shares SMBC initially acquired?
Initially, SMBC disclosed an acquisition of 20 per cent of Yes Bank.
Who is the parent company of SMBC?
SMBC is a wholly-owned subsidiary of Sumitomo Mitsui Financial Group.
