The Board of Directors of AU Small Finance Bank (AU SFB) Ltd and Fincare Small Finance Bank (Fincare SFB) Ltd late Sunday approved an all-stock merger of AU SFB and Fincare SFB.
As per the deal, Fincare SFB shareholders will receive 579 shares in AU SFB for 2,000 shares of Fincare SFB. Post merger, existing shareholders of Fincare SFB will hold 9.9% in AU SFB.
All employees of Fincare SFB will become part of the AU SFB.
According to terms, Fincare Business Services Ltd (FBSL), promoter of Fincare SFB, will infuse ₹700 crore into Fincare SFB prior to the completion of the merger.
Rajeev Yadav, MD & CEO of Fincare SFB, will be appointed Deputy CEO of AU SFB post-merger. He will report to Sanjay Agarwal, MD&CEO of AU SFB.
Mr. Yadav will continue to lead the Fincare unit of AU SFB, which will house most of the businesses of Fincare SFB. Additionally, he will jointly lead the IT & Digital unit of AU SFB with the MD & CEO of AU SFB, to ensure smooth IT integration post-merger.
In his new role, Mr Yadav will be an invitee to Board meetings of AU SFB.
Divya Sehgal, nominee Director on Fincare SFB’s Board will join the Board of AU SFB to ensure smooth integration and continuity post-merger.
Uttam Tibrewal, Executive Director at AU SFB at present, will be elevated to Executive Director & Deputy CEO of AU SFB in the merged entity.
The merged entity will have more than 98 lakh customers, more than 43,000 employees, and 2,334 touchpoints across 25 states and union territories.
Sanjay Agarwal, MD & CEO, AU SFB, in a statement said, “ This is not just a merger of two entities, its a union of shared values, common goals, and a vision for the future. Rajeev and team are one of the most experienced and seasoned MFI teams in the country who have over the years, built the business ground up despite multiple challenges.”
Rajeev Yadav, MD & CEO, Fincare SFB, said,“This merger is a defining milestone in our journey towards facilitating financial inclusion in India, and by joining hands with AU SFB’s strong franchise led by Sanjay and his team, we are confident of building a world-class bank with a robust balance sheet and a truly national franchise”.
