India’s central bank has approved private equity firm Blackstone’s plan to acquire up to a 9.99% stake in Federal Bank, the private lender said on Thursday, clearing the final regulatory hurdle for the deal.
Blackstone had agreed in October to invest about $700 million for a 9.9% holding in the bank. Once completed, the transaction would make the U.S. based firm Federal Bank’s largest shareholder.
The investment will be routed through a Singapore based Blackstone affiliate, with the agreement granting the firm the right to nominate a non executive director to the bank’s board, Federal Bank previously said.
The deal adds to a series of high profile investments by global financial institutions in India’s banking sector, where dealmaking has gathered pace over the past year.
In October, Dubai based Emirates NBD agreed to acquire a 60% stake in RBL Bank, while Japan’s Sumitomo Mitsui Banking Corporation bought a 20% stake in Yes Bank in May, followed by an additional 4.2% stake in September.
($1 = 90.2620 Indian rupees)
