Fairfax to Buy 60.72% of IDBI Bank for $5.6B
The Canadian firm's acquisition of the Indian bank is valued at approximately $5.6 billion and marks a major milestone in India's banking privatization drive, pending regulatory approval
Story timeline3 updates
Cabinet approves sale of government's and LIC's stake to Fairfax for Rs 52,878.08 crore.
IDBI Bank shares fell 7.5% after the acquisition announcement.
Story published. The Canadian firm's acquisition of the Indian bank is valued at approximately $5.6 billion and marks a major milestone in India's banking privatization drive, pending regulatory approval
Fairfax Financial Holdings has been selected to acquire a 60.72% stake in IDBI Bank for approximately $5.6 billion. The acquisition is a significant milestone in India's banking privatization drive.
The deal involves the purchase of the government's 30.48% stake in IDBI Bank, valued at approximately ₹26,620 crore, and the state-run Life Insurance Corporation of India's (LIC) 30.24% stake, valued at approximately ₹26,440 crore. Fairfax will pay ₹81 per share for the acquisition, which is higher than the benchmark fair value of ₹75.99 determined by two independent valuation agencies.
The acquisition is subject to approval from the Reserve Bank of India (RBI) and other regulatory authorities. The RBI will conduct a “fit and proper” assessment, and the deal will also require approval from the Competition Commission of India (CCI) and other statutory authorities.
## What it means The sale of IDBI Bank to Fairfax marks a major milestone in India's long-delayed banking privatization drive. The deal is the largest foreign investment in an Indian bank and is expected to reduce state ownership of commercial enterprises. The transaction began in 2022 but faced a setback earlier this year when initial bids fell below the government's reserve price.
The acquisition is valued at approximately ₹53,000 crore ($5.5 billion), which is a significant investment in the Indian banking sector. The deal is expected to have a major impact on the sector, with potential implications for customers, employees, and the broader economy.
## Next steps The deal will now be subject to regulatory approval, with the RBI and other authorities set to review the acquisition. If approved, the deal is expected to be completed in the coming months, pending the satisfaction of all conditions. The acquisition is a significant development in the Indian banking sector and is expected to be closely watched by investors, customers, and regulators alike.
