AZB & Partners was the transaction counsel for the US$120 billion merger of State Bank of India (SBI) with six other banks. The merger, which took effect from 1 April, involved three listed entities: State Bank of Travancore, State Bank of Mysore and State Bank of Bikaner and Jaipur; two wholly owned SBI subsidiaries: State Bank of Hyderabad and State Bank of Patiala; and Bharatiya Mahila Bank, which was set up in 2013 as a bank exclusively for women and was wholly owned by the central government. The government gave its go-ahead for the merger in June 2016.
AZB’s team was led by partner Ashwath Rau and included partner Anu Tiwari and associates Kashish Bhatia, Pranav Atit, Prajna Mohapatra and Devina Deshpande. The team worked with Anant Thorat, general manager for law at SBI, on the transaction.
Rau, who had moved to AZB from Cyril Amarchand Mangaldas in June 2016, told Asia Business Law Journal he had “a prior relationship” with SBI as he had advised on the merger of State Bank of Indore and SBI, which came into effect in 2010. He had also worked on the merger of ING Vysya Bank and Kotak Mahindra Bank.
“The beauty of this transaction legally was that you had a statute [the State Bank of India Act, 1955] … but the standard which applied was that the merger had to be valid because it was state action, so it had to stand the test of constitutionality,” said Rau. He said the challenge in advising on this transaction had been to “create a process that had not been prescribed under any law” and that “the uniqueness and the innovation involved was what made the whole thing exciting purely from a lawyer’s point of view”.
Shardul Amarchand Mangaldas partner Sapan Gupta advised SBI on the due diligence of Bharatiya Mahila Bank. SBI now has a balance sheet of about US$635 billion, and is one of the top 50 banks globally.