Financial services groups IDFC and Shriram Capital have entered a 90-day exclusivity arrangement to explore a merger between the firms.
“The agreement primarily provides for a mutually agreed exclusivity period for due diligence and discussions between the relevant parties in relation to the potential combination. The proposed potential combination would be subject to due diligence, definitive documentation and applicable board, shareholder, statutory/ regulatory and other third party approvals, as may be applicable,” IDFC said in a statement.
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Under the proposed arrangement, IDFC will become the holding company for the combined group.
Shriram City Union Finance would be merged with IDFC Bank, while Shriram Transport Finance Company will continue to operate as a standalone entity under IDFC and will be eventually delisted following the merger.
The firms are yet to work out a share-swap ratio for the deal. The deadline of 90 days to explore the merger could also be extended if required.
The merger is expected to be completed in 12 months, with the integration process expected to take up to 24 months.
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