India's privately held RBL Bank announced in a stock exchange filing that Emirates NBD will acquire a 60% stake in the bank, for an investment of 268.53 billion Indian rupees (approximately $3.05 billion), through a preferred share issue. This is the largest cross-border acquisition in the Indian financial sector.
This deal is the largest for a Middle Eastern bank in India, coming months after Japan's Sumitomo Mitsui Group acquired up to 25% of Yes Bank.
RBL explained that the deal is subject to regulatory approval, noting that the Reserve Bank of India, the banking sector regulator, has expressed informal support for the deal.
The Dubai-based bank will acquire approximately 60% of RBL shares after the deal closes, according to a stock exchange statement issued by the bank on Saturday. Under the agreement, the Indian bank will issue up to 959 million new shares at a price of 280 rupees ($3.18) per share, a 6.5% discount to Friday's closing price.
The two banks said in a joint statement following the deal announcement, This investment reflects Emirates NBD's confidence in India's rapidly growing financial sector and underscores India's strategic importance within the India-Middle East-Europe Economic Corridor.
RBL Bank, which is wholly owned by individual shareholders and investment funds, said the deal is subject to regulatory approval.
India allows foreign investment of up to 74% in private banks, but does not allow any single foreign institution to own more than 15% unless the Reserve Bank of India grants an exemption.
