Government-owned lender Bank of Baroda (BoB), an Indian multinational, public sector banking and financial services company, on October 11 said that it has contractually signed an agreement with BNP Paribas Asset Management Asia Ltd for a potential merger of their mutual fund business in an all-stock deal. The bank stated it during a stock exchange filing. As indicated by the records, Baroda Asset Management India Ltd. will converge with BNP Paribas Asset Management India Pvt. Ltd., while BNP Paribas Trustee India Pvt. Ltd's. merger with Baroda Trustee India Pvt. Ltd. The transaction is subject to the regulatory approvals of the company.
Bank of Baroda will hold a 50.1% share in the resulting asset management company (AMC) while BNP Paribas Asset Management would hold 49.9% after the completion of the merger. The shareholding of BoB and BNP Paribas in the merged trustee company would be 50.7% and 49.3% respectively. The bank said the merger will help in developing BoB's mutual fund business further by utilizing both BNP Paribas' global asset management know-how and the public sector lender's involvement in running Indian retail systems to further develop the business.
The merger will prompt more prominent business cooperative energies and will also help in making a complete range of schemes as well as bigger sized schemes, the bank said. It will be beneficial to the resulting firm with a stronger balance sheet and net worth to meet capital needs for future growth and expansion. It will also boost its distribution relationships with different types of intermediaries to widen the coverage and outreach to customers, the bank added. The mean assets under management (AAUM) for the Baroda AMC stood at ₹11,320 crore and BNP Paribas AMC was ₹10,073 crore, as of 31 March.
(with inputs from agencies)