Axis Bank's Acquisition of Citi's Consumer Business in India for Rs 12,325 Crore Gets CCI Nod

The Competition Commission of India has approved the Rs 12,325 deal of Axis Bank’s acquisition of Citibank’s consumer businesses in India, the authority announced on Tuesday, July 26. With CCI’s approval, the Axis Bank-Citi merger deal has now moved a step closer to reality. In March this year, private lender Axis Bank said it had agreed to acquire Citi India’s retail assets for $1.6 billion. Axis Bank CEO and MD Amitabh Chaudhry had said there will be no milestone payments in deal, and a cash deal of Rs 12,325 crore will be payable only once entire business gets transferred from Citi Bank.

The CCI approval of Axis Bank’s takeover of Citi India’s retail assets was announced via the commission’s Twitter handle. “Commission approves acquisition of Citibank, N.A.’s and Citicorp Finance (India) Limited’s undertakings comprising of their consumer banking activities by Axis Bank,” the CCI said on Twitter.

Under the agreement between Axis Bank and Citi India, the former will acquire the foreign company’s consumer business in the country. It was said at the time of the announcement of the deal that Axis would also pay another Rs 1,200 crore to aid the transaction. “Axis Bank consolidates its position amongst the large private lenders by entering into an agreement to acquire Citibank’s consumer businesses – covering loans, credit cards, wealth management and retail banking operations in India, in line with its growth ambitions,” Axis Bank had said on March 30.

The transaction between Axis Bank and Citi India will include approximately 3,600 Citi employees supporting the consumer businesses in India, who will transfer to Axis upon completion of the proposed transaction. Axis Bank will also acquire 3 million unique customers of Citibank India that will enhance the lender’s presence in major identified growth segments.

The deal is also expected to make Axis Bank’s Cards balance sheet to grow by 57 per cent with an additional 2.5 million Citibank cards, making it one of the top three cards businesses in the country. Additionally, Axis Bank’s large loan book would be complemented by Citibank’s affluent customer segment, creating product and branch footprint synergies after the transaction is completed.

Citibank’s customers will get benefitted from Axis Bank’s augmented scale, larger geographical reach and width of products and offerings under the agreement. On the other hand, Axis Bank will be able access CitiPhone Banking, to ensure continuity of service excellence for Citibank’s customers, and enhancement of services for Axis Bank customers Moreover, Axis Bank will gain access to seven offices, 21 branches and 499 ATMs of Citi India across 18 cities.

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