Khaitan key to CCI approval of USD1.6bn Axis-Citi deal

Khaitan & Co advised Axis-Citi deal

Khaitan & Co helped Axis Bank in gaining the green light in record time for its INR123 billion (USD1.6 billion) acquisition of Citibank’s Indian consumer business.

The Competition Commission of India (CCI) gave Axis Bank, the country’s third-largest, approval on 26 July in one of the largest deals in India’s financial services sector. The simpler Form-I application was filed on 17 June.

“The experience has been phenomenal as this is one of the largest and the most significant deals in the banking sector. The deal is multifaceted and required constant consultation with the regulators, and focuses on possible reaction from the customers,” Khaitan partner Vidushi Gupta told India Business Law Journal.

The antitrust team at Khaitan, which secured the CCI’s unconditional approval for the transaction in record time, comprised partner Sagardeep Rathi, principal associate Swati Bala, senior associate Alisha Mehra along with associates Nilav Banerjee and Armaan Gupta.

“It was interesting to streamline the customer consent process to achieve maximum customer transfers, ensure retention of customer confidence and appropriately capture purchase consideration adjustments. The experience was further advanced by applying learnings from the other global markets from where Citi has already exited the consumer banking segment,” she added.

AZB & Partners, Clifford Chance and Linklaters also advised on the deal. AZB partner Bharat Budholia and senior associate Gayatri Pradhan advised Citibank NA (acting through its India branch Citi) and Citicorp Finance (India). Prominent UK-based law firms, Clifford Chance and Linklaters, also advised Citibank.

Under the deal announced on 30 March, Axis Bank would take over Citi’s credit cards, personal loans and wealth management businesses that are focused on the affluent segment. The deal is expected to be completed by September 2024 and would help Axis Bank gain access to 3 million new customers.

The deal involved a number of complex overlaps in the business activities of the parties involved in the transaction. Gupta said the deal proved challenging for numerous reasons.

“Full diligence was not feasible due to the expedited timelines, bid process, huge scale of operations and regulatory nuances. Hence, it was critical to prioritise the diligence items to make the process most efficient and productive,” she said.

Gupta said the other difficulties the team encountered was the “separation of the intertwined technology and support infrastructure, which was operationally a key segment of the deal for achieving a seamless transition.

“Customary conditions and precedents had to be tactfully pruned down to ensure deal certainty, while maintaining a balance between regulatory nuances, commercial risks and adequate indemnity protection were also challenging,” she said.

Citibank is the consumer division of the financial services multinational Citigroup, with headquarters in New York City, USA. In India, Citi is a licensed commercial bank, offering a full range of consumer and institutional banking products and services.

Citicorp offers non-banking finance and company business services in India, such as the provision of commercial vehicle and construction equipment loans, etc. As part of its consumer business, Citicorp provides personal loans and asset-backed finance.