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The merger of Dena Bank, Vijaya Bank and Bank of Baroda (BoB) has been approved by the government in order to make it a competitive bank in the world. Ravi Shankar Prasad, union law minister, in a meeting with the press, said: “There will be no impact on the service conditions of the employees and there will be no retrenchment following the merger.”
Post-merger, Bank of Baroda will come out as the third largest bank in India, tailing behind State Bank of India and ICICI Bank. Ravi Prasad also added that the merger has been designed to make BoB as a merged entity, a globally competitive lender.
The government also announced the share swap ratio for the merger of Vijaya Bank and Dena Bank with Bank of Baroda. The shareholders of Dena Bank will receive 110 shares for every 1,000 shares of BoB whereas shareholders of Vijaya Bank will get 402 equity shares for every 1,000 shares of Bank of Baroda.
The government which owns 63.74% stake in Bank of Baroda, 80.74% stake in Dena Bank and 68.77% in Vijaya Bank will, post-merger, own 65.74% in the merged entity.
