Acquisition of Yes Bank and

Bandhan Bank

Anurag Patel
Kumari Lisa
Shashikant Nayak
Vaibhav Sharma
Business Plan
Bandhan Bank:
• Vision: To be a world class bank for convenient and affordable financial solutions to all, in an inclusive and sustainable manner.
• Mission: To provide our customers accessible, simple, cost effective and innovative financial solutions in a courteous and responsible manner. To create
value for all stakeholders through a committed team, robust policies and superior systems and technology.

SWOT Analysis •Strong Brand Equity and Brand •Inventory Management

Awareness •Customer Dissatisfaction
•Diverse Product Portfolio •Lack of critical talent
•Superior product and services •Track record on environment
quality consideration
•High Margins

Strength Weakness

Opportunities Threat

•Reducing Cost of Market Entry and •Growing Protectionism

Marketing into International Markets •Increasing costs component for working in
•Increasing Standardization developed market because of environmental
•E-Commerce and Social Media Oriented regulations
Business Models •Government Regulations and Bureaucracy
•Access to International Talent in Global •US China Trade Relations
Market
•Growing Market Size and Evolving
Preferences of Consumers
Business Plan
Ownership Structure of Bandhan Bank
Holder's Name No of Shares % Share
Promoters 981483046 82.26%
Financial Institutions 89811606 7.53%
Foreign Institutions 74842728 6.27%
Banks Mutual Funds 23099852 1.94%
General Public 18653365 1.56%
Others 5205389 0.44%

External Analysis
Factors
Customer’s Needs Low cost and speedy services
Market/Industry Banking Financial services
Competitive Dynamics Peer Competition from RBL, Laxmi Vilas, City Union and
DCB Bank
Profitability/Cashflow Economic Stability, demand
Emerging Trends Signatureless, Paperless, Branchless
Reason to Acquire Yes Bank

Bandhan Bank wants to sustain the equity, and build the salience where we are
yet to achieve mass recognition.

Synergies
• Operational efficiencies Gain Reduce the cost of lending
• Building Next Gen Banks
• Enhanced Capacity
• Strong National Presence
• Global Reach
Acquisition Plan
• Plan Objectives: To acquire the bank to sustain the equity and build the
salience where we are yet to achieve mass recognition.
• Resource evaluation: The available amount with the Bandhan Bank is less for
acquisition. It will need to raise funds of Rs. 6685.11 Cr for the acquiring.
• Management Guidance: Friendly acquisition
• Search Plan: Search will be based on the criteria to acquire a bank which
creates the operational synergy and which has dominant presence elsewhere
• Negotiation Strategy: The legal structure created to acquire Yes bank is that
Bandhan bank will act as an holding company.
• Initial Offer Price: Rs. 63126.824 Crores
• Financing Plan: Total Equity and Debt combined, Bandhan Bank has 56441.71
Cr but the acquisition amount required is 63126.824 Cr. It will need to raise
funds of Rs. 6685.11 Cr for the acquiring. Since the D/E ratio is 3.91 which is
very high, raising debt will make the company risky.
Deal Structuring Process

• Acquisition Vehicle: Bandhan bank will act as an holding company for Yes
bank post this acquisition deal.
• Form, amount and timing of payment: This acquisition will be in the form
of cash transaction of 63126.824 crores. This shows that deal involves
significant premium over and above the market value and also to
compensate Yes bank shareholders for any tax liabilities.
• Form of Acquisition: It is cash for stock deal where Bandhan bank will
acquire controlling interest in the Yes bank.
• Post-closing organization: Post acquisition Yes bank will operates as an
wholly owned subsidiary of Bandhan bank and Bandhan bank will be the
parent organization.
Deal Structuring Process contd.
• Legal form of selling entity: Since it is a cash transaction, it is
advisable to register under S corporation in order to minimize taxes
by avoiding double taxation.
• Accounting consideration: It is advisable to prepare both standalone
and consolidated financial reports for the parent company.
• Tax consideration: Purchase consideration should try to offset the
target shareholders tax liability.