The amalgamation of Sangli Bank with ICICI Bank has once again highlighted the role of old private sector banks in the consolidation exercise. The deal is likely to prove beneficial to the shareholders of the ailing Sangli Bank, by offering them an opportunity to participate in the growth of ICICI Bank's widely spread out operations.

For ICICI Bank, the merger would give it an immediate access to 198 branches of Sangli Bank, apart from strengthening its rural portfolio. However, unlike in some of the recent takeover deals in banking sector, it is difficult to figure out as to what synergies the merger is likely to result in. Most importantly, there is no clarity on the underlying logic for ICICI Bank to go for a takeover unlike in the case of IDBI's takeover of United Western Bank or Federal Bank's takeover of Ganesh Bank of Kurundwad.

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