Mahindra buys out Goldman Sachs in domestic JV's; Goldman
to set up own operations
Mahindra Bank will acquire the stake held by global investment
bank Goldman Sachs in two financial services subsidiaries
of the bank. Goldman Sachs held 25 per cent each of the
subsidiaries, Kotak Mahindra Capital Company and Kotak
Securities. After the stake acquisition by Kotak, these
two companies will become wholly owned subsidiaries of
Mahindra is to pay Rs210 crore for the 25-per cent stake
in Kotak Securities and Rs123 crore for the 25-per cent
stake in Kotak Mahindra Capital Company.
Kotak Mahindra group has also terminated the strategic
alliance with Goldman Sachs. The two parties have entered
into a business co-operation agreement for one year.
Sachs has separately announced that it would set up its
own investment bank and stock brokerage in India.
relationship between Goldman Sachs and Kotak group started
in the early '90s. Goldman Sachs acquired stakes in the
two companies in 1996.
Mahindra Capital Company is one of the leading investment
banks in the country. The company also has operations
in countries like US, the UK, the UAE and Mauritius through
Securities is one of the largest stock brokerages, focusing
on both the retail and institutional segment. The company
has over 600 branches covering more than 200 locations
across the country.
valuations of Kotak Securities at Rs840 crore and Kotak
Mahindra Capital at Rs492 crore for this transaction are
considerably lower than the market capitalisation of similar
companies. The lower price may be because of the fact
that there is no non-compete agreement between the groups
and Goldman Sachs is free to start operations immediately.
on Kotak Mahindra Bank
reports on M&A