vishnuvega
08-03-2008, 12:05 PM
Infrastructure Development Finance Company (IDFC) will acquire the asset management business (AMC) of Standard Chartered Bank in India for a total consideration of $205 million (approximately Rs 830 crore) in an all-cash deal.
The deal amounts to 5.67% of the total assets under management of Rs 14,141 crore of StanChart's AMC at the end of February 2008.
The deal comes after Reserve Bank of India, in December, rejected Swiss major UBS AG’s bid to buy StanChart's MF business for Rs 516 crore, which was 4% of the total AUM of Rs 12,628 crore.
The current deal, like the ill-fated UBS bid last year, does not include StanChart's mutual fund distribution business, which the London-based bank will continue to pursue in India.
"IDFC is a well-respected financial services company, and we are delighted to have reached an agreement with them for the sale of this business. Standard Chartered will remain a distributor of asset management products in India. India is a key market and delivered record results in 2007,"said Jaspal Bindra, chief executive officer, Asia, Standard Chartered.
The transaction, which is subject to regulatory approvals, is expected to be completed in the second quarter.
Rajiv Lall, managing director and chief executive officer, IDFC, said: "This is in line with our wider strategy of broadening our footprint in the asset management business and diversifying our fee-based revenue streams."
According to sources, IDFC will be retaining the existing staff of StanChart MF. The employees have been offered a hefty stay-on bonus.
Japanese major Shinsei Bank, Indiabulls and Credit Agricole were the other contenders in the race to buy StanChart AMC
The deal amounts to 5.67% of the total assets under management of Rs 14,141 crore of StanChart's AMC at the end of February 2008.
The deal comes after Reserve Bank of India, in December, rejected Swiss major UBS AG’s bid to buy StanChart's MF business for Rs 516 crore, which was 4% of the total AUM of Rs 12,628 crore.
The current deal, like the ill-fated UBS bid last year, does not include StanChart's mutual fund distribution business, which the London-based bank will continue to pursue in India.
"IDFC is a well-respected financial services company, and we are delighted to have reached an agreement with them for the sale of this business. Standard Chartered will remain a distributor of asset management products in India. India is a key market and delivered record results in 2007,"said Jaspal Bindra, chief executive officer, Asia, Standard Chartered.
The transaction, which is subject to regulatory approvals, is expected to be completed in the second quarter.
Rajiv Lall, managing director and chief executive officer, IDFC, said: "This is in line with our wider strategy of broadening our footprint in the asset management business and diversifying our fee-based revenue streams."
According to sources, IDFC will be retaining the existing staff of StanChart MF. The employees have been offered a hefty stay-on bonus.
Japanese major Shinsei Bank, Indiabulls and Credit Agricole were the other contenders in the race to buy StanChart AMC