Business Merger and Acquisition, SBI - Current Affairs Questions and Answers

ANSWER: Rackspace

Explanation:
Cloud services provider Rackspace Hosting Inc said it would be acquired by Apollo Global Management LLC in a deal valued at USD 4.3 billion. The PE firm will boost investments in the technology sector.

• Rackspace’s shares went up 4.3 percent at USD 31.50 in early trading on 25th August.
• Offer represents a premium of 38.2 percent to Backspace’s closing price on August 3, the day prior to reports that the company was in advanced talks with PE firms for a go private deal.
• Rackspace had been reported to earlier be in talks with Apollo
• As part of the deal closing in the 4th quarter, PE firm Searchlight Capital Partners will also make an investment in Backspace
• Apollo with USD 186 billion in assets have been stepping up investments in technology
• Affiliates of the firm in July agreed to acquire Outerwall Inc, the owner of Redox video rental kiosks private in a deal valued at USD 1.6 billion
• Rackspace leases server space and helps corporations store and access data in cloud.
• It has focused on growing its cloud business in the face of rising competition from established players such as IBM Corp, Microsoft and startups in the field
• Citigroup, Deutsche Bank, RBC Capital Markets LLC and Barclays were financial advisors while Goldman Sachs and Co advised Backspace.
• Financing for the deal is being provided by CItigroup, Deutsch Bank, Barclays, Royal Bank of Canada are providing financing for the deal
• Paul, Weiss Rifkind and Wharton & Garrison LLP are legal advisers to Apollo while Wilson Sonsini Goodrich & Rosati is Rackspace’s Legal Adviser.

ANSWER: 5

Explanation:
The merger of the five associate banks with the SBI will lead to increased capital base and availability of loan, as the Lok Sabha passed the bill approving the amalgamation.

The Lok Sabha passed the bill to repeal the SBI (Subsidiary Banks) Act 1959, State Bank of Hyderabad Act 1956 and to further amend the State Bank of India Act, 1955, following the merger of five associates with the parent SBI.

With this merger, the SBI has come in the list of top 50 banks globally and is ranked at the 45th position.

The merger will bring about increased capital base and increased ability to give loans. Also, small banks will get access to products like mutual funds.

During the last two years, 29 crore bank accounts were opened, of which 25 per cent were zero balance accounts and farm loans increased from INR 3.5 lakh crore in 2009-10 to INR 10.65 lakh crore in 2016-17.

The merger will help increase SBI’s scope of operation and will pose a challenge to private banks as it will work as per the requirements of the people.

The merger has been planned keeping in mind the benefit of people and going forward its benefits will be seen.

According to the statement of object and reasons of the State Banks (Repeal and Amendment) Bill 2017, after the acquisition of the subsidiary banks by SBI, the subsidiary banks have ceased to exist and, therefore, it is necessary to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.

Five associates and the Bharatiya Mahila Bank became part of State Bank of India (SBI) beginning April 1, catapulting the country's largest lender to among the top 50 banks in the world.

The five associates that were merged are State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT).

Following the merger, the total customer base of SBI increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.

The merged entity began operation with a deposit base of more than INR 26 lakh crore and advances level of INR 18.50 lakh crore.

As per the bill, after the acquisition of all the subsidiary banks by the SBI, it is not necessary to retain such provisions in the State Bank of India Act, 1955. .

Therefore, certain amendments are necessary in the said Act in so far as they relate to the subsidiary banks. The amendments are consequential in nature.

SBI had 90 per cent shareholding in the State Bank of Mysore, 75.07 per cent shareholding in the State Bank of Bikaner and Jaipur and 79.09 per cent shareholding in the State Bank of Travancore.

SBI: Know More

• State Bank of India is an Indian multinational, public sector banking and financial services company.
• It is a government-owned corporation with its headquarters in Mumbai, Maharashtra.
• Customer service: 1800 425 3800
• Chairperson: Arundhati Bhattacharya
• Headquarters: Mumbai
• Founded: 1 July 1955
• Major Subsidiaries: SBI Cards, State Bank of Hyderabad

ANSWER: SBI

Explanation:
India’s largest commercial bank State Bank of India (SBI) on Tuesday said it has launched a dedicated portal ‘SBI Realty’.

This will help home buyers to choose flats from its 3,000 approved projects across the country, which are spread across 13 states and Union Territories covering 30 cities.

State Bank of India has taken another step towards customers’ convenience by launching ‘SBI Realty’ - a one stop integrated website www.sbirealty.in for home buyers.

At present, there are 9.5 lakh home units available on the website. Customers can compare current and past trends of prices for the properties in various localities in the city.

The portal will assist customers in calculating appropriate loan amount a customer should borrow based on income and credit profile.

SBI believes in innovation combined with an emphasis on market research, contemporary architecture, strong project execution and quality construction.

The SBI Realty website has been developed by SBICAP Securities in association with PropEquity in terms of data support, project information, etc.

SBI: Know More

• SBI is the largest commercial bank in India in terms of assets, deposits, profits, branches, customers and employees.
• The company has a deposit base of Rs 25.85 lakh crore.
• It has an extensive network, with over 24 thousand branches in India and 194 offices in 35 other countries.

ANSWER: Nepal

Explanation:
Nepal SBI Bank, a subsidiary of the State Bank of India, today launched its fully automatic digital banking services SBIInTouch in the Nepalese capital Kathmandu.

This is for the first time the State Bank of India has expanded the paperless banking system outside India.

Digital banking provides various services including cash deposit, opening of new accounts, distribution of debit card, ATM and online banking information on touch of the screen.

Customers can avail the services from SBI Intouch Bank.

The digital banking unit also has a robot, which provides important information to customers in an interactive manner.

Nepal Rastra Bank Governor Chirinjibi Nepal, SBI Bank’s chairperson Arundhati Bhattacharya and Indian Ambassador to Nepal Manjeev Singh Puri, jointly inaugurated the new service, the first of its kind in Nepal.

The paperless banking service has been launched to target potential younger customers who are exposed to digital technology.

Paperless banking is a revolution in the banking sector of Nepal, said Chiranjibi Nepal.

ANSWER: Thomas Cook India Group

Explanation:
Thomas Cook India Group, the holding company of Fairfax in India, has acquired five destination management companies of Kuoni Group for ₹125 crore.

The acquisition will deliver greater synergies and growth opportunities across inbound, outbound, MICE and corporate travel businesses.

In April, the company had entered into an agreement with Kuoni to acquire these businesses located in Asia, Australia, Middle East, Africa and Americas and the deal closed on June 29, 2017.

The acquisition will enable Thomas Cook India Group to expand its global footprint to 21 countries in 4 continents.

These companies include Asian Trails in Asia Pacific, Allied T Pro in North America, Desert Adventures in Middle East, ATM in Australia and Private Safaris across Southern and Eastern Africa.

With the addition of 17 new countries through the acquisition, Thomas Cook India Group’s travel business network had expanded significantly adding 1,000 crore to the company’s top line and ₹25 crore to profit before tax (PBT).

Prior to this acquisition, the Group’s Thomas Cook (India), SOTC Travel, TCI-SITA and Kuoni Hong Kong had a network spanning 4 countries which include India, Sri Lanka, Mauritius and Hong Kong.

Post acquisition, The Thomas Cook India Group’s employee strength has gone up to 6,500 people in 21 countries. It has a combined revenue of ₹8,700 crore.

The acquisition of a significant part of Kuoni’s Global Destination Management network represents an important milestone for a rapidly growing Thomas Cook India Group.

ANSWER: bank.sbi

Explanation:
The State Bank of India (SBI) on 20^th Feb 2017 announced rebranding of its website as bank.sbi.

According SBI, the new domain name bank.sbi is the highest domain protocol known as generic top level domain (gTLD), an official statement.

The SBI group has several businesses. For those wanting to do banking or want to know about the bank it is easier to type out www.bank.sbi.

The SBI group having presence in insurance, mutual fund and card may also go for such Generic top-level domain (gTLD).

With this, SBI has become the first banking organisation in India to use a gTLD for its online presence and providing an exclusive experience of assurance and security to its customers.

SBI being the largest bank has always been the pioneer in adapting new technology.

SBI has always believed in providing high-tech yet secure internet experience to its customers.

Bank's own gTLD is another step in this direction.

SBI's Chairperson is currently Arundhati Bhattacharya.

Bank's own gTLD aims at simplifying the digital experience of customers and brings in enhanced security against phishing and lookalike websites.

Due to its non-replicability, a gTLD site like ".sbi" conveys an assurance to the customer that the site is authorised, genuine and is not an inappropriate or phishing site.

The existing site of sbi.co.in will continue till customers get used to the SBI's new secure website.

SBI: Know More

• State Bank of India is an Indian multinational, public sector banking and financial services company.
• It is a government-owned corporation with its headquarters in Mumbai, Maharashtra.
• Founded: 1 July 1955
• Subsidiaries: SBI Cards, State Bank of Hyderabad etc

ANSWER: 5

Explanation:
The merger proposal was announced in May 2016 and was scheduled for March 2017.

The Union Cabinet on 15th Feb 2017 approved the merger of five of State Bank of India subsidiaries - State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore - with the SBI.

The merger proposal was announced in May 2016 and was scheduled for March 2017.

Finance Minister Arun Jaitley said that the Cabinet had earlier given its in-principle approval for the merger, and then had sent it to the respective banks for their suggestions.

These suggestions have been taken on-board, and the decision has been formally approved by the Cabinet.

This will lead to far greater operational efficiency and synergy of operations within these banks.

It will decrease the cost of operations, which will also result in a decrease in the cost of funds.”

The merger is likely to result in recurring savings, estimated at more than INR. 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds.

Existing customers of subsidiary banks will benefit from access to SBI’s global network.

SBI, following the merger, will not only be a large domestic bank, but will also become a global player as well.

ANSWER: SBI

Explanation:

• INS Vikramaditya, the largest warship and latest aircraft carrier of the Indian Navy, has a strength of over 1500 personnel.
• A versatile national capability and a full-fledged township by herself, the ship has a new acquisition – an ATM machine installed on-board by the nation’s largest bank and banking network, the State Bank of India.
• The facilities offered by the State Bank of India to the ship include cash withdrawals, generation of mini-statements, access to bank balance details and change of PIN numbers.
• In the near future, the facility will be upgraded to a recycler machine with a cash deposit facility.
• Additionally, facilities like cash transfer, Card-to-Card transfer, Credit Card payment, mobile number registration and updating would also be available.
• The ATM machine is a unique floating banking system, and along with the Point of Sale machine that is also proposed to be installed on-board, would go a long way in supporting cashless transactions on the ship, in line with the government’s policy of digitising the India economy.
• It will enable personnel of the ship to manage their domestic financial requirements better and assist them in conducting their money transactions at their own convenience.

ANSWER: The Eye Tribe

Explanation:
Facebook’s virtual reality-focused Oculus division has acquired eye-tracking technology startup The Eye Tribe based in Denmark for an undisclosed amount.

The Eye Tribe startup was founded in 2011 by four students from the IT University of Copenhagen. It develops software that enables eye control on mobile devices and computers, allowing hands-free navigation.

The acquisition will benefit Facebook’s Oculus to integrate eye-tracking software to its Rift VR (virtual reality) headset, allowing users to control actions by moving their eyes.

Oculus, a virtual reality company, was acquired by Facebook in 2014 for 2 billion dollars. It had rolled out two new features - Parties and Rooms - for Samsung Gear VR.

Oculus

CEO: Brendan Iribe

Founded: 2012, Irvine, California, United States

Headquarters: Menlo Park

Acquisition date: March 25, 2014

Founders: Jack McCauley, Brendan Iribe, Palmer Luckey

Head organization: Facebook, Inc.

ANSWER: Essar

Explanation:
Russia’s Rosneft Oil Company along with its partners on 15th Oct 2016 acquired India’s second biggest private oil firm Essar Oil in an all cash deal valued at USD 13 billion

• Rosneft’s partners include Rosneft Oil Company, United Capital Partners and Trafigura
• The acquisition was announced during the 8th BRICS Summit in Goa
• Rosneft will have a 49 percent stake in the refinery, port and petrol pumps of Essar Oil
• The remaining partners will split the 49 percent equity equally
• Remaining 2 percent will be held by minority shareholders after the delisting of Essar Oil
• Deal includes USD 10.9 billion for Essar’s Vadinar refinery and USD 2 billion for the port terminal that feeds the refinery
• It also includes Essar Oil’s debt of USD 4.5 billion and USD 2 billion debt with the port company and power plant
• Rosneft now becomes the third international player after after Royal Dutch and Shell and British Petroleum to enter the Indian fuel retailing market
• Essar Oil a subsidiary of Essar Group is a fully integrated oil & gas company and is among the largest single site refineries in Vainer, Gujarat with the capacity of 20 MT
• Essar Oil has a portfolio of offshore and onshore oil and gas blocks with around 1.7 billion barrels of oil equivalent in reserves and resources
• The company was established in 1969
• Essar Group is led by Shashi Ruia and Ravi Ruia