They discussed the Indian market and its potential. Tilmant spoke of his grand design for ING in India. Part of the conversation was about ING's decision to buy 1.8% of Kotak in a share sale that year. The idea then was to treat this albeit small holding as a springboard for the Dutch group's ambitions in India, along with ING Vysya BankBSE -0.18 %, said two people familiar with those discussions. Then came the credit crisis that forced Tilmant to go to the Dutch government cap in hand.
Key Player who Swung Deal in Kotak's Favour
This led to the almost inevitable denouement that played out last month as Kotak Mahindra announced its all-stock purchase of ING Vysya in a transaction valued at $2.4 billion. Kotak Mahindra is in the process of absorbing ING Vysya to become the fourth-largest private sector bank in India. ING will own 6.5% of Kotak Mahindra and nominate a member to the board.
The turn of events highlight the unpredictable manner in which fast-unfolding events can upset plans in ways least expected. Although every private sector bank in India was at one time or the other interested in ING Vysya fs small and medium enterprise loan franchise, 573 branches, and a64,582 crore in assets, it was Kotak Mahindra that swung the deal. And it managed to strike a deal that some in the M&A world consider to be pegged at a lower-than-expected premium.The negotiations for this p ..
Funnily enough, Uday Kotak, renowned as a rainmaker, wasn't the most critical player in all of this, nor was it Ralph Hamers, the current CEO of ING. Those who know say it was Vaughn Richtor, the head of ING Direct in Australia, who swung the deal decisively in favour of Kotak Mahindra.The Chennaiborn Richtor, who was head of ING Vysya before his current assignment in Australia, has had a long association with Kotak Mahindra and is aware of the organisation fs culture and its people.
Indeed, the relationship was so strong that when ING decided to dispose of its subsidiary, it did not even ask for bids from others as it was comfortable dealing with Kotak, said a person who did not want to be identified. The stock swap may not even be considered a sale by normal standards as ING will continue to own a stake in the bank and have a director on board. Now the question is this: Given that ING is working toward emerging from its financial mess internationally, is there any plan to ..
