Deutsche Bank provides escrow solution to ABB on a cross border tender offer
Deutsche Bank provided a customised escrow solution to Switzerland-headquartered ABB in relation to the company’s cross border tender offer to minority shareholders in India
ABB required an escrow partner to facilitate a USD 126mn Mandatory Tender Offer (MTO) to minority shareholders of their Indian listed entity. The MTO was triggered by ABB’s sale of an 80.1% stake in its power grids business to Hitachi and was mandatory under Securities and Exchange Board of India’s SAST (takeover code) regulations.
From a timeline perspective ABB needed the provider to work backwards to ensure meeting the global M&A deadline of the power grid business sale. ABB ran a competitive process among banks to facilitate this critical role with experience in regulatory adherence and quick operational turnaround.
ABB chose Deutsche Bank’s Trust & Agency Services team’s customised escrow solution including foreign exchange services. The team worked within a three week deadline once the prerequisite process and approvals were in place to meet the MTO deadline.
All know-your-customer document checks were completed and the escrow agreement negotiated in a very short window despite severe operational challenges posed by Covid-19.
ABB managed to meet their committed deadlines on their local MTO and global M&A closure dates. The time-bound escrow solution helped them to reduce execution risk and meet their strategic corporate objectives in a key market, while ensuring compliance with regulations.
“We are grateful to DB for their contribution to the transaction. The DB team was committed to the timeline and showed a high level of expertise and professionalism throughout the process.” says Urs Arnold, ABB Treasurer.
“The mandate highlights the strong relationship Deutsche Bank has with ABB and their confidence in our ability to deliver on the time-critical transaction and offer sound advice on deal mechanics”, says Sanket Patil in Deutsche Bank’s Trust & Agency services team in India.
Stuart Harding, Head of Trust & Agency Services in Asia adds: “We are proud to support this significant transaction - one of the largest public cross-border escrow deals involving Switzerland and India - to help the ABB achieve a successful and timely completion.”