CCI Approves Blackstone Backed Entity's Stake Acquisition In Federal Bank

The Competition Commission of India (CCI) on Tuesday approved the proposal of Blackstone-backed Asia II Topco XIII Pte. Ltd. to acquire up to a 9.99% stake in Kerala based-private lender Federal Bank Ltd. This will be done through warrant acquisition.

Asia II Topco XIII is controlled and managed by affiliates of Blackstone Inc., a global private equity firm with investments across multiple sectors. Under the approved transaction, the entity will acquire warrants carrying the right to subscribe to fully paid-up equity shares of Federal Bank.

Upon full exercise of the warrants, the acquirer would hold up to 9.99% of the bank's paid-up share capital on a fully diluted basis.

The transaction structure also permits the acquirer to nominate a director on the board of Federal Bank, subject to maintaining a minimum shareholding of 5% of the bank's paid-up equity capital.

Federal Bank is a private sector commercial bank headquartered in Kerala. It operates across retail banking, small and medium enterprise lending and non-resident Indian banking, offering deposit, credit and payment solutions to retail and corporate customers.

A detailed order from the competition watchdog is expected to follow.

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