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India's IndusInd Bank Ltd agreed an all-share deal on Saturday to buy microlender Bharat Financial Inclusion Ltd for close to 155 billion rupees ($2.4 billion), boosting its presence in microfinance lending and rural banking.
The deal values Bharat Financial at 1118.47 rupees a share, an 11.4 percent premium to the stock's Friday closing price of 1,004 rupees.
"The combination brings together entities with significant complementary strengths and huge synergistic advantages," IndusInd Chief Executive Romesh Sobti said in the statement.
The deal is expected to add value from the start given IndusInd's lower cost of funding among other factors, the companies said in the statement. They said Bharat Financial's distribution network also offered large untapped deposit potential from rural and underserved Indian customers.
Deutsche Bank analysts have previously said the deal would help IndusInd become a dominant player in the microfinance industry and boost its earnings by 2019.
Bharat Financial, a for-profit group that focuses on lending small sums to poorer women in rural areas, has 6.8 million borrowers and "last-mile" customer access to 100,000 Indian villages. The combined group will have more than 2,600 branches.
Shares in IndusInd closed at 1,750.35 rupees on Friday, giving the bank a market value of more than $16 billion.