IDFC-Shriram Group merger called off; firms unable to reach common ground

According to IDFC, the two stakeholders were unable to agree on a mutually agreeable swap ratio.

IDFC Ltd and Shriram Group on Monday called off a potential merger. In a BSE filing, IDFC stated that despite best efforts, IDFC Group and Shriram Group have not been able to reach common ground on a mutually acceptable swap ratio for the merger. 

 

Accordingly, both parties have agreed to call off discussions on a potential merger and the exclusivity period pursuant to the CES Agreement entered into between the concerned parties stands terminated with immediate effect.

 

The original plan entailed merging the retail arm, Shriram City Union Finance, with IDFC Bank, unlisting Shriram Transport Finance and making it a fully-owned unit of IDFC and the holding company of the merged entity.

 

The government of India holds 16.38 per cent in IDFC Ltd. Other major foreign shareholders include Orbis Sicav, Platinum Asia Fund, Orbis Global, East Bridge Capital, and Sipadan Investments (Mauritius) Ltd, which is an arm of Malaysian sovereign wealth fund Khazanah Nasional Berhad. Sipadan holds 9.47 per cent in IDFC and the rest foreign shareholders own little more than 20 per cent. Akash Bhanshali of Enam Securities, and Ashish Dhawan, co-founder of Chrysalis Capital, are prominent individual shareholders of IDFC.

IDFC stock ended 2.68 per cent down at Rs 61.70, while, Sriram City Union Finance gained 1.93 per cent to end at Rs 2,186.25 on BSE.